Preamble

The House met at half-past Two o'clock

PRAYERS

[Madam Speaker in the Chair]

Oral Answers to Questions — HEALTH

Hospital Provision (South-west London)

Dr. Goodson-Wickes: To ask the Secretary of State for Health what recent consultations she has had concerning the provision of hospitals in south-west London. [22851]

The Minister for Health (Mr. Gerald Malone): Local health authorities, national health service trusts and general practitioners in south-west London are considering the future provision of hospital services in the area.

Dr. Goodson-Wickes: Does my hon. Friend accept that although the London borough of Merton does not have a general hospital within its boundaries, thanks to Government reforms it already has unrivalled access to three excellent national health service hospitals, St. George's hospital, St. Helier hospital and Kingston hospital? Does he agree that the picture would be completed by the exciting new plans to rebuild the Nelson hospital in Wimbledon, so that my constituents can have access to the highest quality day surgery and out-patient care?

Mr. Malone: My hon. Friend has been a staunch advocate of that proposal. It is intended that the review of specialist services, which is under way, will improve services across the area that serves my hon. Friend's constituency. I am sure that his points will be borne in mind by all concerned.

Mr. Nicholas Brown: As London has half the number of health centres per person of other major cities in England and fewer GPs, health visitors and district nurses than it had in 1990, and as there has been a decrease of 2 per cent. in the number of GPs per head of the population in inner London in the past decade, how can the Minister claim to be presiding over a shift from hospital services to primary care? Surely he is getting rid of beds without providing alternative services.

Mr. Malone: As it is essential to provide excellent health care in London, combine specialist services, improve primary care and continue the Government's investment in primary care, such as the £210 million investment in the London implementation zone scheme, why do the hon. Gentleman and his party want to stop all that in its tracks and call for yet another review?

Consultant Specialties

Rev. Martin Smyth: To ask the Secretary of State for Health if she will make a statement on the shortage of staff in consultant specialties in the health service. [22852]

The Secretary of State for Health (Mrs. Virginia Bottomley): In the five years to 1993, the number of hospital consultants in England increased by an average of 3 per cent. a year, well above the target of 2 per cent. set in 1987. Over the same period, the number of consultants in Northern Ireland increased by 12 per cent. The Government have established effective mechanisms to ensure that consultant numbers continue to expand to meet demand.

Rev. Martin Smyth: If the Government are controlling numbers to meet demand, why are there continuing shortages, particularly among anaesthetists and paediatricians, which mean that operations have been cancelled? Is someone in the Department using new maths and not counting correctly? Is it job protectionism, or are hospitals saving money at the cost of patient care?

Mrs. Bottomley: I explained that there has been a substantial increase in the number of consultants, but there are always times when there is particular pressure on certain categories. That is why we have set up a working arrangement with the professions, whereby one committee can monitor and anticipate where there is particular pressure. The hon. Gentleman will be pleased to know that, for example, in paediatrics there was a 5.5 per cent. increase in consultants and in accident and emergency there was a 6.7 per cent. increase. The increase has been above average in both those specialisms.

Mrs. Roe: Will my right hon. Friend confirm that the Government are committed to increasing the number of medical students and have taken on board the recommendations to that effect by the Medical Workforce Standing Advisory Committee? Will she also comment on the training of doctors? Can she say anything further about the implementation of the Calman changes?

Mrs. Bottomley: I can indeed inform my hon. Friend that, having not only published the first report of the Medical Workforce Standing Advisory Committee but acted on it, we shall shortly produce the second standing advisory committee report. We train about 500 more medical students a year than we did 10 years ago and we anticipate further increases. My hon. Friend referred to the important Calman proposals to improve and accelerate specialist training. We are working on their detailed implementation, from which future generations of consultants will greatly benefit.

Mrs. Bridget Prentice: Is the Secretary of State aware of public alarm at the number of casualty departments being temporarily closed—including at least five in London? Is she further aware of concern that—

Hon. Members: Order.

Madam Speaker: Order. The question has already been widened.

Mrs. Prentice: Is the Secretary of State aware that those closures might be due to staff shortages or, more


likely, to the Government's policy of permanently closing casualty departments? What guarantee can she give London in particular that such closures will not recur?

Mrs. Bottomley: The hon. Lady identifies an area of special focus—accident and emergency departments—in which there has been an 11.1 per cent. increase in consultant appointments because it is moving towards a consultant-led service. That is precisely what underpins the move to larger A and E departments associated with minor injury centres. Junior doctors will increasingly want to staff areas that offer an A and E service according to best practice—well staffed, well equipped and of significant size.
I am sure that the hon. Lady is aware that the Royal College of Surgeons commented recently that placement in an A and E department is not necessary for training. As a result, we are holding discussions with professional groups to ensure that those jobs continue to be attractive. Our job must be to ensure top quality, well-staffed, well-equipped A and E departments for the people of this country.

Mr. Heald: Does my right hon. Friend agree that consultant numbers have increased well ahead of target? Will she join me in congratulating North Hertfordshire NHS trust based at Lister hospital on the appointment of a new audiology consultant in September which, together with the new magnetic resonance imaging scanner later this month, will make a huge contribution to improved patient care for my constituents?

Mrs. Bottomley: I join my hon. Friend in congratulating his trust, which is a classic example of how trusts have used the opportunities of their status to improve patient services and make them more responsive. I confirm that there have been an extra 300 consultants a year for the last four years. We intend to maintain and improve that impressive record.

Hospitals

Mr. Turner: To ask the Secretary of State for Health how many hospitals there were in England in 1979, April 1991 and December 1994. [22853]

Mr. Malone: In 1979 there were 2,023 hospitals in England, and in 1991 there were 1,624. For 1994, NHS Estates, using a different basis of calculation, has estimated the number at 1,440.

Mr. Turner: Have not 245 hospitals closed since 1990—one per week since Conservative health reforms were introduced? Does the Minister agree that as a result of record waiting lists, hospital closures and bed losses, the NHS is at breaking point in many parts of the country? Operations have been cancelled, specialist beds have been unavailable and there has been the unholy sight of many people on trolleys waiting hours in casualty departments.

Mr. Malone: If the hon. Gentleman were to look at his own constituency, he would see a different picture from that which he painted. In 1989–90, there were 560 waiters over two years; in 1995, there is none. In 1989–90, there were 214 two-year waiters; in 1995 there is none. Investment projects totalling £17 million are under way in the hon. Gentleman's constituency. Of course there have been a number of closures, but substantially better

facilities have been put in their place. Why does not the hon. Gentleman recognise that when it is happening in his constituency?

Mr. Rowe: Is my hon. Friend aware that people in my constituency have warmly welcomed the closure—regrettable though it is in some respects—of the oldest hospital in Britain, St. Bart's, and of All Saints hospital, the former workhouse? It is shortly to close, almost entirely owing to the large investment put into the Medway hospitals complex, which will provide unrivalled modern facilities. Does he agree that this counting of hospitals is meaningless?

Mr. Malone: My hon. Friend is quite right. The purpose of the health service reforms was to allow services to be provided closer to people. That is precisely what my hon. Friend points out in respect of the reconfiguration of services in his constituency.

Mrs. Beckett: Does the Minister accept that we are pleased to learn that he has found out some facts about hospitals, as it is not long since he told us that he did not know how to define one. I hope that that means that the questions that we table will in future be answered. Does he nevertheless accept that there is considerable concern in many parts of the country about the pace of change, and that when Ministers say, as they repeatedly do, that they do not know what is happening in terms of the provision of hospitals and do not know which hospitals or A and E departments are at risk, they add to that concern?
The Secretary of State said a moment ago that Ministers are concerned about standards of hospital care and of accident and emergency provision. How can they know that standards are being met if they do not even know what is happening on the ground?

Mr. Malone: The right hon. Lady is well aware that these matters are decided locally. When they are disputed or objected to by community health councils, they come to Ministers for decision. Hence a tremendous amount of reconfiguration of service and change is going on around the country by local agreement.
It is not good enough to be obsessed with old buildings; it is far better to look at the new investment going into the health service. More than 700 schemes costing more than £1 million each have been completed in the course of the past decade. That is the measure of the Government's commitment to an improved health service. I do not understand why the right hon. Lady is obsessed with the past.

Residential and Nursing Home Care

Mr. Sims: To ask the Secretary of State for Health what guidance she offers to local authorities in assessing the means of persons in need of residential and nursing home care; and what plans she has to amend the figures on which such calculations are based. [22854]

The Parliamentary Under-Secretary of State for Health (Mr. John Bowis): Comprehensive guidance was issued to local authorities in December 1992 and is regularly updated.

Mr. Sims: At present, anyone with capital of more than £3,000 is expected to contribute towards the cost of his care, and anyone with more than £8,000 has to pay in full. Will my hon. Friend confirm that the figures were


inherited in 1993 from the income support system and have not been altered since? In fact, they date back to 1990. Does he agree that they are perhaps due for review?
Will my hon. Friend consider clarifying the guidance that he gives local authorities, which take into account the full occupational pension of a person in a residential nursing home? This often means that the spouse left in the family home has no income whatever and may have to resort to income support.

Mr. Bowis: My hon. Friend's statement of the figures is correct. They were brought into line with income support figures in 1993, when the threshold was raised from £1,200 to £3,000. We do indeed keep the figures under review and will continue to do so.
As for the occupational pension, local authorities have a discretion to enable a spouse to remain at home with the same standard of living to which he or she has been accustomed. My noble Friend Lord Mackay asked in another place for any evidence that this discretion was not being used properly to be brought to the Government's attention. I repeat that request today; to date we have received no such evidence. We shall, however, consider the matter, as we promised to do, in another place.

Mrs. Dunwoody: Is the Minister aware that literally thousands of people are terrified that they will become so frail that they will be removed—forcibly, if need be—from an NHS bed and sent to a private home, leaving their families unable to make up the difference between the fees and the amounts available? That not only frightens large numbers of people but implies that the system is on the verge of breaking down.

Mr. Bowis: I refer the hon. Lady to the guidance that we recently issued on continuing care and on discharge; and to one of the conditions of the special transitional grant—that there should be agreement between the social services and hospitals. There has been no change to the system for charging introduced in 1948 by the then Labour Government. This Government introduced the discretion and the requirement that the value of the house be ignored for spouses and other members of a family who may remain at home.

Mr. Wilkinson: Will my hon. Friend publish the results of his review? As my hon. Friend the Member for Chislehurst (Mr. Sims) has made clear, in parts of outer London, such as my constituency of Ruislip-Northwood, a place in a residential nursing home can cost several hundred pounds a week, which can lead to a spouse eventually having to sell the family home, causing great distress over and above that of looking after the sick patient. Will my hon. Friend publish the review and re-examine the criteria?

Mr. Bowis: There is no review as such. I said that we kept the matter under review. If we decide to make a change, we shall announce it. However, I can reassure my hon. Friend that, where a spouse remains at home, there is no question under this Government of that spouse being turned out of the family home. That is precisely the requirement that we put into law which was not there under the previous Labour Government. We have also

given the discretion to enable that spouse to remain in the family home according to the standard of living to which he or she has been accustomed.

Mr. Wigley: Does the Minister accept that people with on-going medical needs are being pressurised to move from hospitals into private nursing homes because of the in-built financial structure of the health care authority and its lack of beds? Surely anyone with an on-going medical need should be able to stay on in an NHS hospital.

Mr. Bowis: The hon. Gentleman is correct. If someone is deemed by a doctor to have a continuing in-patient health care need, that should be provided by the NHS, whether in a hospital or a bed purchased by the NHS. It is only if doctors decide that there is no longer an in-patient health need that a patient will be discharged into the community where the community health services will continue to be free to that individual. However, as has been the case since 1948, the social care needs would be paid for by the individual unless that individual's income warrants support by previously the benefit and now the community care system.

Mr. Sumberg: Does my hon. Friend recognise that there is considerable concern among elderly people and their relatives that the family home, for which they have saved over many years, may well have to be sold? Will my hon. Friend urgently and radically consider proposals to exempt such homes?

Mr. Bowis: My hon. Friend is correct to raise the concern of his constituents. I am happy to give him the assurance that we will continue to review the situation to ensure that the family is looked after. We already have in place assurances that we can give to families, and to spouses in particular, and now we must consider whether the figures that are in place are still adequate to meet the needs.

Mr. Hinchliffe: Does the Minister recall that one of the key objectives of the assessment process was the avoidance of unnecessary institutional care? Is it not a fact that many people are still being placed unnecessarily in care homes because of the requirement to spend the bulk of the community care grant in the private sector? Will the Minister make it clear which is more important—the proper assessment of individual needs or propping up the private care market?

Mr. Bowis: Yet again, we see the naked hostility to the private sector that has been so apparent from the Labour party ever since we introduced the community care policy. It is clear that the assessment of the individual is central to community care. The individual takes part in that assessment and the individual and the individual's carers take part in discussions on how to meet the needs of that assessment.
It is then a question of whether it is possible to enable the individual to stay at home with a package of care or whether it is better to place the person in residential care. That is a matter for the assessment, which should involve the appropriate medical input. We have no dogmatic view on whether someone should stay at home or go into residential care. We want the individual to receive the best care, irrespective of from which sector that care comes.

Elective Surgery

Mr. Ottaway: To ask the Secretary of State for Health what proportion of elective surgery is now carried out on a day-case basis. [22855]

The Parliamentary Under-Secretary of State for Health (Mr. Tom Sackville): Half of all elective surgery is done on a day-care basis.

Mr. Ottaway: In the light of that excellent answer, will my hon. Friend pay tribute to Croydon's Mayday healthcare trust? More than half its non-urgent surgery is carried out on a day-care basis, and it has just opened a brand-new paediatric day-case unit. Does my hon. Friend realise that, if he had listened to the Opposition last week, all that would have been put in jeopardy? Is it not the Conservative party that is looking forward, and the Labour party that is looking backward?

Mr. Sackville: I can confirm that 90 per cent. of cataract operations carried out at the Mayday hospital, 73 per cent. of arthroscopies and 54 per cent. of laparoscopies are performed on a day-case basis. That is good news for patients in my hon. Friend's constituency, and I am glad that he has endorsed and paid tribute to what has been a central policy in my Department.

Mrs. Mahon: When the Minister gives figures showing an increase in day-case surgery, does he take into account the extra work load for nurses? Does he not feel just a little ashamed of the fact that those who have made that increase possible are now balloting on whether to take industrial action?
Is it not time that the Minister stopped insulting nurses, and started to pay them a proper rate for the job? At present, nurses are scrabbling about with trusts which do not care, and which are not—as the Minister claimed—offering them a 3 per cent. pay increase: they are offering 1 per cent., or 3 per cent. if extra elements are taken into account. That involves altering nurses' working conditions.

Mr. Sackville: Nurses do a wonderful job in day-case units, and it is right and fitting for their pay to reflect that.

Night Services (General Practitioners)

Mr. Simon Coombs: To ask the Secretary of State for Health if she will make a statement on the provision of night time services by general practitioners. [22856]

Mr. Malone: Night-time services provided by family doctors are integral to British general practice. On 20 April, after discussions with general practitioner leaders, we proposed changes to strengthen services by increasing the support for local GPs working together to offer high-quality care to patients in their area.

Mr. Coombs: No doubt my hon. Friend is aware that the number of night visits by GPs has more than doubled in the four years to last year. Is he fully satisfied that the proposals that the Department has put to the BMA—on which it will vote in the next few days—reflect that fact? How satisfied is he that the BMA will accept what is, on the face of it, a very reasonable proposition?

Mr. Malone: It is perhaps not surprising that, when the hours of night cover were extended some years ago, night

fees and the number of night visits increased. About 50 per cent. of the increase in visits is attributable to that increase in hours of cover.
As GPs across the country decide whether to accept the proposal, I ask them to bear two points in mind. First, it is fair to them; secondly, it is fair to their patients. It will encourage the sort of co-operative arrangement that I saw in Reading, which serves my hon. Friend's constituency. That is certainly one of the possible ways forward, providing first-class out-of-hours cover for patients.

Mr. Bryan Davies: If the services are satisfactory, will the Minister condemn, and take steps to stamp out, the practice of hotels charging their residents for night-time visits when they are taken ill on the ground that national health service provision is inadequate and private doctors must be called in?

Mr. Malone: There is nothing to prevent anyone who is resident in either a hotel or private premises from making his or her own arrangements to seek emergency care.

Mr. Budgen: Is my hon. Friend aware that there is, in general, great satisfaction in Wolverhampton about the way in which GPs provide night-time services? Will he pay a sincere compliment to the hon. Member for Wolverhampton, South-East (Mr. Turner)? For 20 years, in all his observations about matters connected with the health service, the hon. Gentleman has screamed that there is a crisis, and has said that the best way of dealing with that crisis is to spend a large amount of someone else's money. Is he not to be commended for the splendid consistency of his views?

Mr. Malone: His consistency is the equivalent of others who cry wolf too often and eventually get ignored. My hon. Friend makes a good, substantive point—that care in his constituency is good. The proposals for GP out-of-hours cover are designed to improve on that, to reduce the burden on medical practitioners who wish to undertake fewer night visits and to ensure that the quality of care for patients is improved during that important period when they need to call on medical services.

GP Fundholding

Mr. Gunnell: To ask the Secretary of State for Health what research her Department has undertaken into the administrative costs of general practitioner fundholding; and if she will make a statement. [22857]

Mrs. Virginia Bottomley: The management costs of general practitioner fundholding are kept under regular review. In the first three years of the scheme, general practitioner management costs were about 2 per cent. of budgets, which represents excellent value for money for the very real benefits to patients resulting from the scheme.

Mr. Gunnell: I am sure that the Secretary of State is aware that the magazine Fundholding, which can hardly be said to be unsympathetic to fundholders, has estimated that the amount spent on setting up the scheme and on administration was £98 million, and that the average cost per fundholding practice is more than £80,000. There is also plenty of research to show that this is a much more expensive way of purchasing for district health


authorities. Does not she think that the money should have been put into patient care and not into creating an expensive administrative system?

Mrs. Bottomley: I do not agree with the hon. Gentleman. I believe, as does the King's Fund, that fundholding has been one of the most exciting aspects of our health service reforms. I recommend to the hon. Gentleman the words of the National Audit Office, the Organisation for Economic Co-operation and Development and Professor Howard Glennerster. They have all confirmed that fundholding has made care much more responsive to patients. The amount spent on management is modest compared with the substantial improvements in patient care and the better value for money that has been achieved by the scheme.

Mr. Quentin Davies: Is my right hon. Friend aware that in Lincolnshire well over 50 per cent. of patients are now treated by fundholding general practitioners? Is not that a remarkable tribute to the popularity of fundholding among GPs and patients, and does not it vindicate the Government's decision to go ahead with this proposal despite the consistent opposition of the Labour party?

Mrs. Bottomley: I commend the example of Lincolnshire, but perhaps the most interesting example is to be found in Derbyshire. In Derby, South, 78 per cent. of the population have fundholders. That shows how persuasive is the Opposition spokesman on health with her local general practitioners, all of whom totally disregarded her words and decided that there were benefits for their patients by taking up the fundholding option.

Mrs. Beckett: Is the Secretary of State aware that managers in some parts of the country are said to be insisting that general practitioners become fundholders and are refusing to provide financial or administrative support to groups of GPs who want to become commissioning GPs although that is a much less expensive and more effective system? Those managers claim to be acting on instructions from the Department of Health. Why?

Mrs. Bottomley: Let me make it clear that fundholding is and will remain voluntary. Undoubtedly, fundholding offers much more direct control to the general practitioner for securing, commissioning and monitoring services than joint commissioning. Joint commissioning clearly has a part to play, but in our view it is not as effective as proper GP fundholding. As the right hon. Lady will know, we have now set up 51 total fundholding projects which are being carefully evaluated to see what further lessons can be learned.

Mr. Evennett: Does my right hon. Friend agree that GP fundholders are delivering a clear benefit to all patients in their areas? Does she further agree that the waiting time for the patients of GP fundholders tends to be shorter and that the opportunity for a better and more varied service in the surgery is greater?

Mrs. Bottomley: I very much agree with my hon. Friend. I hope that he agrees that waiting time for all patients is shorter. Before the reforms there were 200,000 one-year waiters and he will know that there are now only 31,000. That affects all patients, irrespective of whether they have GP fundholders. It is right to say that the

Opposition do not care. They do not want to know the facts because they might get in the way of the rhetoric. I agree not only with my hon. Friend but with the OECD that GP fundholders have been more prepared to challenge hospital practices and demand improvements. The National Audit Office states:
the direct involvement of general practitioner fundholders in health care purchasing has led to improvements in the service provided for their patients".

Broadgreen Hospital

Mr. O'Hara: To ask the Secretary of State for Health if she will make it her policy that the accident and emergency department of Broadgreen hospital will not be closed until adequate alternative facilities are made available. [22858]

Mr. Bowis: It already is.

Mr. O'Hara: I am delighted to have that assurance. The Minister will be aware, however, that at the turn of the year the accident and emergency department has almost closed perforce due to lack of recruitment of qualified staff. He will also be aware of leaked reports that it was to be closed on 31 July when the contracts of staff recruited in crisis came to an end. Will he ensure that steps are in place to ensure that Broadgreen accident and emergency department is fully staffed to remain open after 31 July? Otherwise, my constituents in Knowsley, South will continue to live in fear and suspicion that the trust in which they have no trust is trying to engineer the closure of the department before adequate facilities are in place.

Mr. Bowis: The hon. Gentleman's constituents can have trust in the trust. One has to consider only the brand new A and E department at Fazakerley hospital, the largest and best equipped not only in this country but in Europe, the £2.7 million extension to the Royal Liverpool University hospital A and E department, and the new £9 million critical care unit at St. Helens and Knowsley hospital, to be completed in April 1996. The pledge is there that the A and E department at Broadgreen hospital will not be phased out until those facilities are in place.

National Blood Authority

Mr. Illsley: To ask the Secretary of State for Health when she last met the chairman of the National Blood Authority to discuss rationalisation proposals. [22859]

Mr. Sackville: Ministers meet the chairman of the National Blood Authority regularly.

Mr. Illsley: The Minister will be aware of the national blood transfusion service's continued difficulties consequent upon those rationalisation proposals, the latest of which is the purchase by the NBA of blood-testing kits which are regarded as inferior for HIV and hepatitis testing and are banned in many countries. In the past few months, the level of blood donations has decreased in this country, staff employed in the blood transfusion service have been completely demoralised, many skilled staff have left the service and, above all, there has been a


complete loss of public confidence in that precious service. Will the Minister advise the chairman of the NBA to abandon the rationalisation proposals once and for all?

Mr. Sackville: I am aware of a continuing attempt by the hon. Gentleman to make his political name by undermining the blood service—[Interruption.] He has continually claimed that blood donations are down, when they are holding at the level of last year. Demand for blood has gone up by 4 per cent. and donations have gone up by 5 per cent. As he knows, the plans to rationalise the blood service are to do with that fact that it has always been run regionally, so there is too much processing and too much testing. We must reduce those overheads on the service.

Dame Elaine Kellett-Bowman: Does my hon. Friend agree that blood centres must be run for the benefit of the donors who give their blood freely and the teams who so devotedly serve them? Does he further agree that nothing whatever in the consultation document, or in anything that Sir Colin Walker has subsequently said, militates against that? Will he further emphasise his comment that the Opposition's political agitation is causing great dismay and is unnecessary?

Mr. Sackville: I confirm that, whatever happens, specialist services, such as the anti-D donors, are being retained in Lancaster. My hon. Friend is right: the allegations have been attempts to be undermine the confidence of donors, but they have failed.

Statistics

Mr. Win Griffiths: To ask the Secretary of State for Health what plans she has to change the way in which statistics are collected for publication on activities in the NHS. [22860]

Mr. Sackville: There are no specific major changes in prospect, but each statistical return is reviewed at least once every three years, and every item is subjected to rigorous examination.

Mr. Griffiths: Many people will be disappointed with that reply because a strong case exists for radically overhauling NHS statistics. For instance, does the Minister agree that we should publish statistics on the readmission of patients to hospital so that we can measure the quality of the care that they receive there, the success of the treatment and the availability of good quality community care?

Mr. Sackville: The hon. Gentleman is aware that in England we went over from deaths and discharges to a system of finished consultant episodes some years ago. Wales did not follow at that time, but it is now setting up a patient episode database which roughly mirrors our system. That is good news because the new Körner statistics are a proper measure of patient activity.

Mr. John Marshall: Does my hon. Friend accept that, however the figures are collated, there is strong evidence of a shortage of beds in London for the mentally ill, as was discussed in the Adjournment debate last Wednesday?

Mr. Sackville: We are making considerable progress in the provision of intermediate beds and in all other areas of mental health. The Under-Secretary of State, my hon.

Friend the Member for Battersea (Mr. Bowis), has replied to such debates on numerous occasions and has explained the plans that are in place to ensure that we improve mental health services everywhere in the country.

Ms Jowell: The Minister used statistics to defend the Secretary of State's reputation and to obscure the real information about patient care, which only goes to prove that Disraeli was right about statistics. Will the Minister now undertake to publish figures for the number of patients treated by the NHS and not what Ministers' jargon calls finished consultant episodes?

Mr. Sackville: I begin by welcoming the hon. Lady to the Opposition Front Bench at Question Time. Unless we have reliable statistics which show the activity all over the health service, we do not know what is happening. There is no point in relying on individual incidents which are entirely unrepresentative of the health service, as the hon. Lady and her friends in the press continually do.

Mr. Hendry: Is not the reality that the Opposition parties wish to change the way in which statistics are calculated because they are horrified at the number of additional patients being treated every year and appalled by the fact that waiting lists are falling and the only way they can achieve bad statistics is by changing the basis on which the statistics are collected? Can my hon. Friend confirm that in my constituency we have no patients waiting for more than 12 months for an operation? Is that not the statistic that really matters?

Mr. Sackville: My hon. Friend is right. If one ignores the fact that 120 patients are being treated now for every 100 treated before the reforms, which is an embarrassing statistic for the Opposition, it is impossible to measure the success of the reforms.

Hospital Closures, London

Mrs. Roche: To ask the Secretary of State for Health how many (a) hospital beds and (b) hospitals have been lost in London since 1990. [22861]

Mr. Malone: The number of acute hospital beds in greater London has been reduced by around 1,900 between 1990–91 and 1993–94. The equivalent figure for inner London, including the special health authorities, is around 1,000. Information on the hospitals that have closed is not held centrally.

Mrs. Roche: Given that a ward has recently closed in Hornsey central hospital in my constituency without consultation and that waiting lists have increased by 7 per cent. in the Whittington hospital, which also covers my constituency, does the Minister now accept that, although the Government may have won the vote last week, they did not win the argument in the House or with the people in London or in the constituencies?

Mr. Malone: I will tell the hon. Lady what we did win last week and that was a vote for better health care in London, for bringing specialist medical care together on fewer sites, and obtaining better value for money and a better quality of health care. We made some progress towards improving London's health care in both the acute and primary care sectors and the Opposition want to call a halt to that progress.

Dame Jill Knight: Does my hon. Friend accept that for many of us what is important is not the number of


hospitals or beds that are closed but the number of patients treated? In view of the extra primary care being offered, the number of day care patients being treated and the number of patients dealt with by general practitioners, would it not be extraordinary if the number of hospital beds stayed exactly the same?

Mr. Malone: My hon. Friend is quite right. The relevant statistic is the number of people treated. What is important is the amount of activity in the health service, not the simple number of beds. As for London, there is no bed target. It is up to individual health authorities to determine from time to time how many beds are necessary to provide care for the people living in their area. My hon. Friend is also right to point out that the Labour party is obsessed with the bricks and mortar of the health service, whereas we want to improve patient care.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. Nigel Griffiths: To ask the Prime Minister if he will list his official engagements for Tuesday 16 May. [22881]

The Prime Minister (Mr. John Major): This morning, I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.

Mr. Griffiths: As the vast majority of the British public want to see the accounts of political parties open to maximum public scrutiny, will the Prime Minister join Labour in calling for the Nolan committee to examine all aspects of party political funding? Or what has he got to hide?

The Prime Minister: As the whole House knows, within the past 18 months the Home Affairs Select committee conducted a full inquiry, into these matters. Subsequent to that inquriy, the conservative party has implemented in full the code of practice drawn up by the Committee. The Labour party has refused to do so.

Mr. Lamont: Will the Prime Minister take an early opportunity to point out to the public that almost every country in Europe has had to put up taxes to deal with the effect on deficits of the recession? Will he also point out that, every after recent tax increases, the tax burden in this country in the 1990s will be lower than it was in the 1980s, just as it was lower in the 1980s than in the 1970s, including deficits? Will my right hon. Friend also point out that, thanks to Conservative Governments, this country has by a long way one of the lowest tax burdens in Europe?

The Prime Minister: rose—[Interruption.] My right hon. Friend is entirely right—[Interruption.]

Madam Speaker: Order.

The Prime Minister: I commend to hon. Members opposite the excellent speech that my right hon. Friend made on this matter on Friday last week. As a result of the recovery, and despite the tax changes that we were

compelled by the recession to make, households will actually be about £250 a year better off on average after tax and inflation this year.

Mr. Blair: Given the latest pay and perks scandal in the utilities at the weekend and today's massive rise in electricity profits, does the Prime Minister recognise that the utilities have degenerated into an unseemly racket and that the sooner he orders a thorough overhaul of their system of regulation the better? [Interruption.]

Madam Speaker: Order. I will have no more barracking from sedentary positions by individual Back Benchers. They will be named the next time.

The Prime Minister: Everyone wishes to see consumers protected. That is precisely why we have regulators to control prices and why, when necessary, the regulators have acted to control prices. Utility prices have fallen during the period of privatisation.
Although I have not yet had the opportunity to consider in detail the proposals of the shadow Secretary of State for Trade and Industry, I have to say that artificial plans to control profits smack very much of old Labour, not new Labour. The determination of what the Opposition call "reasonable profits" seems to me to be impossible. Who determines their level? Who says what is reasonable? What happens when profits bounce back after a period in which there have been losses? Do they apply just to the utilities or to other industries? These are the sort of questions that we would have asked of the Labour party in the 1970s; now we discover that we must ask them of the Labour party in the 1990s as well.

Mr. Blair: Will the Prime Minister confirm the following? Electricity prices in real terms for domestic households have risen since privatisation, as the House of Commons Library confirmed this morning; water charges have risen by more than 40 per cent. since privatisation; gas complaints are up by 150 per cent. in the past year—[Interruption.] He can cap rail fares only by promising an open-ended subsidy from the taxpayer to privatised operators. Why does he always stick up for the excess profits and the managers who make themselves into millionaires rather than the hard-pressed consumer, who is forced to use such monopoly services and is fed up with the way they are being run?

The Prime Minister: That was very well prepared, but almost entirely inaccurate. The reality is that the nationalised industries once cost the taxpayer £50 million a week and the privatised industries now yield £50 million a week. The average price of domestic electricity to households has fallen by 8.5 per cent. in real terms over the past two years; the price of gas has fallen by more than 20 per cent. in real terms since privatisation; BT's main prices have fallen by more than 35 per cent. in real terms since privatisation; Britain's water is now among the cleanest in Europe—[Interruption.] When those industries were all nationalised, prices went up year after year after year. The Opposition would like to control and regulate from the centre; they are determined to go back to when prices went up and not down year after year after year.

Dr. Spink: Will my right hon. Friend join me in welcoming yesterday's vote by the police, which showed that they do not wish routinely to carry arms? Does he feel, like me, that the best way in which to protect the


police from those who carry arms is to increase the sentences that we can inflict on such people, and will he consider bringing back the death penalty for the murder of police officers?

The Prime Minister: I certainly very strongly support the decision not to carry firearms taken by the police in their ballot yesterday. That is wholly in tradition with policing in this country. I believe that it is the right decision and I warmly congratulate the police on having reached it. In recent years, we have increased the penalties for a large number of offences. I shall not retail them all at this moment, but I will willingly set them out in a parliamentary answer if my hon. Friend wishes me to do so. As my hon. Friend knows, I personally do not favour the return of capital punishment.

Mr. Ashdown: If the Conservative party has put its house in order on the question of funding, why will the Prime Minister not allow Lord Nolan to look into it? Does not the question of funding of all political parties go to the heart of the public's concern about trust in our political system? Does the Prime Minister not realise that, while he got high marks for establishing the Nolan committee, he will get no marks if he now seeks to turn what he told us was to be the public's bloodhound into the Prime Minister's poodle?

The Prime Minister: I do not think that anyone who has studied the membership of the Nolan committee or knows any of its members would remotely recognise the right hon. Gentleman's description of it. As he knows, there are only two ways of funding political parties in a free democracy. One is by subscription or donation freely given, and it is right in an open society that donors, if they wish, should preserve anonymity. [Interruption.] The other way is to fund political parties out of taxpayers' money. I do not favour that way and I hope that we shall not go in that direction. What is wrong about funding of political parties is when the funding of a party actually buys influence over its policy.[Interruption.] That is what is happening with the Opposition, where trade unions have 70 per cent. of the votes in Labour policy-making bodies, and even the proposal for dramatic reform would only diminish that to 50 per cent.

Mr. Duncan Smith: Does my right hon. Friend agree that, although the nuclear non-proliferation treaty has been signed there remains a serious threat of proliferation, and that the possession of a nuclear weapon is a measure of deterrence against those who would possess nuclear devices? Does he not find it absurd that Labour Front-Bench spokesmen say that they would hold Trident but would never use it? Does he think that that would deter anybody?

The Prime Minister: I suppose that there is a logical case for saying that one would scrap Trident—although I passionately disagree with that case, as I believe that Trident is necessary as a deterrent—but it is absolutely intellectually unsustainable to say that one would have Trident as a deterrent, but to tell those whom it is there to deter that one would never use it. If that is their position, the Opposition might as well take the money and pour it down the nearest drain.

Mr. Win Griffiths: To ask the Prime Minister if he will list his official engagements for Tuesday 16 May. [22882]

The Prime Minister: I refer the hon. Gentleman to the reply I gave some moments ago.

Mr. Griffiths: Can the Prime Minister confirm that there are now an extra 500,000 people, notably those on low incomes, paying tax, principally because of the cuts in the married person's allowance last month, and that, after 16 years of Tory government, there are a record 26.2 million people paying income tax? Is the message not clear: "Tory Governments damage your wallet"?

The Prime Minister: First I must tell the hon. Gentleman that, if we had retained the Labour tax regime, there would have been an extra 1 million people in tax today. As for his specific questions, there are two substantive reasons why more people are paying tax this year. One is wage drift upwards. The second is the number of people who were unemployed but who are now in work and paying taxes. I should have thought that the hon. Gentleman would welcome that drop in unemployment.

Mr. Jenkin: To ask the Prime Minister if he will list his official engagements for Tuesday 16 May. [22883]

The Prime Minister: I refer my hon. Friend to the reply I gave some moments ago.

Mr. Jenkin: Further to the notice that I have given my right hon. Friend, as we approach the 1996 intergovernmental conference in Europe, and more particularly as we approach the 'reflections' group meeting in the summer, will he undertake to publish the Government's contribution to that group? Is it not essential that the IGC should address not stories about square strawberries and straight bananas, but the real public anxieties about growing European Union power—anxieties which the Leader of the Opposition apparently does not share, as he would give away the veto? Like one of his predecessors, the right hon. Gentleman may be fit to become a European Commissioner one day, but he is unfit to lead this nation.

The Prime Minister: I am grateful to my hon. Friend for giving me notice of the matter that he proposed to raise. I certainly agree that the European Union needs to be more responsive to the views of its people, with less interference and less red tape. We shall enter the IGC with a positive agenda, providing for more intergovernmental co-operation in a Europe of nation states, including co-operation in foreign policy, in defence and in the international battle against crime.
I believe that the European Union, both at the IGC and beyond, should give more consideration to Europe's place in the world rather than to the internal politics of the nations currently within it. We shall also press for more subsidiarity, more action against fraud and mismanagement, and a strengthened role for national parliaments. We shall not


surrender our veto or our opt-outs from the social chapter and the single currency. I will consider my hon. Friend's request that we should publish our paper.

Mr. Wicks: To ask the Prime Minister if he will list his official engagements for Tuesday 16 May. [22884]

The Prime Minister: I refer the hon. Gentleman to the reply I gave some moments ago.

Mr. Wicks: Does the Prime Minister agree with the statement of his Health Minister, Baroness Cumberlege, speaking to the Royal College of Nursing, that
community care clearly isn't working
and, if so, what does he intend to do about it?

The Prime Minister: I understand from my hon. and noble Friend—who is more familiar with the quotation than I am—that the hon. Gentleman has quoted the remark out of context.

Mr. Bill Walker: To ask the Prime Minister if he will list his official engagements for Tuesday 16 May. [22885]

The Prime Minister: I refer my hon. Friend to the answer I gave some moments ago.

Mr. Walker: Does my right hon. Friend agree that a tax-raising legislative assembly in Edinburgh which fails to address the West Lothian question and the number of Members from Scotland in this House is bound to be unworkable and will be merely a stepping stone to separation?

The Prime Minister: I agree with my hon. Friend. It would be unworkable because some questions about it are unanswered and unanswerable. No one has yet explained why Scottish Members should be able to vote on English matters while English Members would not be able to vote on Scottish matters. There is silence from the Opposition on that. No one has yet explained why people who live in Scotland should pay more tax simply for the pleasure of being in Scotland. Again, there is silence from the Opposition. If the Opposition were serious about the constitution of Scotland, they would long ago have been able to answer a range of questions on the matter. Yet they still cannot answer them. Their policy is bad for Scotland, bad for the economy and bad for the United Kingdom.

Nuclear Non-proliferation Treaty

Madam Speaker: We now come to a statement—[Interruption.] Will Members please leave the Chamber quickly as we have an important statement to hear now?

The Secretary of State for Foreign and Commonwealth Affairs (Mr. Douglas Hurd): With permission, Madam Speaker, I would like to make a statement on the outcome of the non-proliferation treaty review and extension conference.
For 25 years, the non-proliferation treaty has helped prevent the spread of nuclear weapons. It is one of the essential foundations of our security. On 11 May the parties to the treaty decided unanimously to extend the treaty indefinitely. That decision is excellent news. A permanent treaty, properly applied, will make the world a safer place. It will provide the stability and predictability essential to continuing efforts towards disarmament and to the peaceful use of nuclear energy.
The conference also agreed by consensus a number of important texts, copies of which will be placed in the Library. The declaration on principles and objectives for nuclear non-proliferation and disarmament calls upon states not party to the treaty, in particular those with unsafeguarded nuclear facilities, to join it as a matter of urgency. It affirms the support of all states parties for the safeguards regime administered by the International Atomic Energy Agency and for efforts to increase the agency's capability to detect undeclared nuclear activities.
The programme of action on disarmament in the declaration stresses the importance of completing negotiations for a universal and verifiable comprehensive nuclear test ban treaty no later than 1996, the early conclusion of negotiations on a convention banning world wide the production of fissile material for nuclear weapons and the determined pursuit by the nuclear weapon states of systematic and progressive efforts to reduce nuclear weapons globally, with the ultimate goal of eliminating those weapons.
The British delegation played a weighty part in negotiating the declaration. The Government endorse it. The objectives it sets are in line with the policies we have pursued and will continue to pursue. When I spoke to the conference on 18 April, I underlined our commitment to early progress on the comprehensive test ban treaty and a cut-off convention. As the House knows, we have dropped our requirement for so-called safety tests and we have stopped production of fissile material for explosive purposes. I made clear in New York our readiness to join multilateral negotiations for the global reduction of nuclear weapons when progressive reductions by the United States and Russia bring their forces to a level comparable with our own minimum deterrent.
The conference decided that the treaty's review mechanism should be strengthened. It agreed that review conferences should be held every five years, that those conferences should be prepared more intensively and that their proceedings should be better structured to make them more effective. We welcome these decisions. It is essential that adherence to the treaty be properly monitored.
The agreements reached in New York were the result of many months of careful and painstaking negotiation. Our delegation was one of 21 in the core negotiating

committee convened by the conference chairman. We worked closely with the United States, our European Union partners and other members of the group of western countries. We also collaborated closely with key non-aligned states. I would mention South Africa, in particular, which did outstanding work in achieving a result acceptable to all. The effort was immense and, for example, involved about 150 of our diplomatic posts around the world as they put our case, but it was abundantly worth while.

Mr. Robin Cook: May I welcome the extension of the non-proliferation treaty, which for two decades has provided an international barrier to the spread of nuclear weapons? May I also welcome the Foreign Secretary's praise for South Africa? Its decision to dismantle its nuclear devices and to play a full part in the non-proliferation treaty shows a commitment to nuclear disarmament on which the Government of South Africa are to be congratulated.
Will the Foreign Secretary admit, however, that the debates at the review conference were much more controversial than his statement acknowledges? Will he confirm that the conference failed to agree the review text on progress under the treaty because most non-aligned countries do not believe that enough has been done by the nuclear weapon powers to honour their commitment under article 6 to pursue negotiations on nuclear disarmament? Will he confirm that the European Union was unable to table a unanimous text because even a number of European countries did not accept that enough had been done under article 6 by both France and Britain?
Does the Foreign Secretary recall stating in January that he did
not feel any particular pressure from…non-nuclear weapon states
for nuclear disarmament by Britain? Can he honestly repeat that claim after three weeks of such pressure at the review conference? Will he now recognise that the extension of the non-proliferation treaty must not be taken as removing the pressure on the nuclear powers to negotiate towards disarmament?
May I press the Foreign Secretary on what steps the Government are going to take to implement the principles and objectives in the final declaration of the review conference? It may come as a surprise to his Back Benchers, but in his statement he took credit for the weighty part played by Britain in negotiating that declaration. What is Britain going to do now to honour it?
The declaration demands assurances by nuclear weapon powers that they will not use such weapons against countries that do not possess them. Will the British Government therefore abandon the right that they have claimed to use nuclear weapons against countries that have none? Can the Foreign Secretary name the circumstances in which he thinks that it would be justifiable to use nuclear weapons against such countries?

Mr. Michael Fabricant (Mid-Staffordshire): So the hon. Gentleman would disarm unilaterally?

Mr. Cook: I have to tell the hon. Gentleman that I am quoting from the declaration that the Conservative Government have claimed a weighty part in negotiating. The House wants to know what the Government are going to do to implement the commitments that they made in New York.
The declaration calls for respect for nuclear-free zones. Will the Government respect all such zones and, if so, will they drop their refusal to observe the south Pacific nuclear-free zone? The declaration calls for the detection capability of the International Atomic Energy Agency to be increased. Is the Foreign Secretary aware that the safeguards budget of the agency has been frozen for 10 years? What, therefore, does he propose to do to increase its capability?
Finally, the Foreign Secretary stated that he endorsed the declaration and quoted the commitment in it to the elimination of nuclear weapons. His endorsement of that declaration is welcome, particularly since it has been reported that the British delegation privately lobbied to drop the commitment to the elimination of nuclear weapons. In view of that position in the negotiations, and of the expression of disagreement with it from his Back Benchers, the Government will be judged on their commitment to the elimination of nuclear weapons, not by his statement today, but by their record in the remaining two years available to them, and on what steps they take to working towards a world without nuclear weapons.

Mr. Hurd: I can answer some of the hon. Gentleman's specific questions. I am glad that he was glad about the outcome of the conference.
On funding, we agree that every effort should be made to ensure that the International Atomic Energy Agency has the necessary financial and human resources, and we are willing to consider a fully justified and controlled real increase in the agency's regular budget in 1997–98 to strengthen the safeguards regime.
On security assurances, the declaration states that we
will not use nuclear weapons against non-nuclear weapon states parties to the treaty on the non-proliferation of nuclear weapons except in the case of an invasion or any other attack on the UK, its dependent territories, its armed forces or other troops, its allies, or on a state towards which it has a security commitment, carried out or sustained by such a non-nuclear-weapon state in association or alliance with a nuclear weapon state.
The hon. Gentleman will want to study that declaration, but I think that it gives a reasonable answer to his question.
As I reported to the House when the hon. Gentleman questioned me about it a short time ago, I gave a certain number of undertakings in New York about the steps that we would now take. On a comprehensive test ban treaty, we no longer press for tests on safety grounds because we believe that we can maintain our deterrent without such tests. We have agreed to a cut-off in the production of fissile material and have given the security assurance that I mentioned. I also said that, in a world in which US and Russian nuclear forces were counted in hundreds rather than thousands, Britain would respond to the challenge of multilateral talks on the global reduction of nuclear arms. That corresponds closely to the wording of the declaration that was finally agreed.
The hon. Gentleman is in difficulty here. In the past few weeks, he has spent a good deal of energy setting out at considerable length in the broadsheets which he and his hon. Friends read, and in the New Statesman and Society, the reasons why the British Government could not achieve an indefinite extension of the nuclear non-proliferation treaty without making concessions about our deterrent which we were not willing to make. He has been proved entirely wrong. We have managed to join others in notching up this significant achievement for the greater

safety of the world without giving undertakings about our minimum national deterrent, which the hon. Gentleman wrongly said would be indispensable. He is clearly wrong, which is why we had those equivocations today.
We believe that our tactics and strategy were well directed and that we gave undertakings that were necessary, but not further undertakings that would weaken this country's security.

Mr. David Howell: Does my right hon. Friend accept that the indefinite extension of the treaty is good for the world, and that he and his colleagues in this country have played a significant part in achieving that result? Does he also accept, however, that the problem with all those treaty-based regimes is not so much signing the bits of paper as achieving monitoring, compliance, verification and the underpinning of intelligence, without which none of the treaties will work, because countries will sign them without necessarily complying with them? Will he assure us that resources will be put in place, both nationally and internationally, particularly in the intelligence sphere, to ensure that this treaty-based regime, like those for chemical and biological weapons when those treaties are signed, go forward and are made to work in an increasingly dangerous world?

Mr. Hurd: I agree entirely with my right hon. Friend. We need a treaty—we now have one—that is indefinitely extended. But having got the treaty signed, we must ensure that the signatures are worth while. We have anxieties about two countries that have signed the treaty: we have continuing anxieties about North Korea; and we have anxieties about Iran, which have been fairly well documented in recent weeks.
It is important that the IAEA is properly budgeted—the hon. Member for Livingston asked about this—to carry out its duties, and that member states use all their assets and abilities to document the carrying out of the treaty in practice.

Mr. Menzies Campbell: May I welcome the extension of the treaty, particularly the additional commitment to a test ban treaty? Does the Foreign Secretary share the disappointment of many that, so soon after the decision to extend the treaty, the Chinese Government carried out a nuclear test?
The Foreign Secretary did not refer to the middle east, but he will be aware that that is an area where the proliferation issue is at its most acute. When Israel refuses to acknowledge its possession of nuclear weapons, Iraq has previously signed the non-proliferation treaty but ignored it and Iran is clearly embarked on a programme designed to achieve nuclear capability, how will the treaty assist the issue of nuclear proliferation in the middle east?

Mr. Hurd: We noted the Chinese test yesterday. I was not particularly surprised by it, but it shows how far we still have to go. It is worth noting that the Chinese statement includes a clear commitment to abide by a comprehensive test ban treaty when it is agreed. The middle east has been a difficult area of negotiation because of the attitude taken by Israel, which is understandable, but to some extent out of date. The conference passed a resolution on the middle east. It does not single out Israel, but we believe that all non-party states in the middle east—there are several of them—


should adhere to the treaty and it is particularly important that states with unsafeguarded nuclear facilities should accept safeguards.

Mr. Nigel Forman: While welcoming the Government's willingness to support extra resources and appropriate personnel for the IAEA, if that proves necessary, will my right hon. Friend say more about the part that we may play in future multilateral negotiations on our strategic deterrent? He mentioned that we may be prepared to join those negotiations if and when the two super-powers, as they were once called, reduce their strategic armoury to roughly our level. Can he confirm that our level represents about 5 per cent., for example, of the American strategic capability?

Mr. Hurd: We believe that our level, which has substantially reduced in explosive power in recent years, is the minimum that we need. It is a small proportion of the armoury either of the United States and Russia. As I said in New York and repeated to the House a few minutes ago, a world in which American and Russian nuclear forces were counted in hundreds rather than thousands would be one in which we would respond to the challenge of multinational talks on the global reduction of nuclear arms. That is similar to what the Government have said before. It is reasonable, and it is as far as we could be expected to go.

Mr. Andrew Faulds: Perhaps the Foreign Secretary would tell us what is so understandable about Israel's nuclear policy. Other countries could mount exactly identical arguments.

Mr. Hurd: It is understandable as, for many years, Israel was surrounded by neighbours who, to varying degrees, were in a state of hostility to her. That has passed, but the policy remains. Israel needs to move, but we can understand the security preoccupations which to some extent hold her back.

Mr. John Wilkinson: Will my right hon. Friend commend the Government of the Ukraine on their positive programme of dismantling its nuclear forces, thus creating a very satisfactory background for the recent visit of President Clinton, which was an outstanding success? What part did the United Kingdom play in advising Ukrainian authorities on their programme of dismantling their nuclear forces and what part might we and our Western European Union partners play in confidence-building measures to restore Ukraine?

Mr. Hurd: My hon. Friend is entirely right. If the Ukraine, which inherited some of the considerable power of the Soviet Union's nuclear weapons stockpile, had acted differently, the whole story would have had a much less happy ending. Ukraine had a political problem and wrestled with it and that was not easy. I and other Foreign Ministers from the west visiting Kiev urged the Ukrainians to move ahead, and they have done so. The result was satisfactory and, as my hon. Friend clearly knows, we and the Americans have given practical help to the Ukraine—for example, in transporting weapons to Russia for decommissioning.

Mr. David Winnick: Should not the Foreign Secretary's words condemning China's nuclear

test yesterday have been stronger? Why is it that, time and time again, excuses are made for that notorious police state? I know that the President of the Board of Trade is in China, but surely—as with South Africa in the past—appeasement does not pay. It is about time we stopped supporting a notorious tyranny.

Mr. Hurd: I am not conscious that I was supporting it. I simply explained what happened and what will be the content of the Chinese statement. I hope that the outcome will be a comprehensive test ban treaty that we are prepared to join and by which the Chinese, as they said yesterday, will abide when it is agreed. That is the way to make sure of no more tests of that kind.

Mr. Harold Elletson: I congratulate my right hon. Friend on the treaty's extension, but is he confident that all its signatories will be as good as their word? Will be specifically comment on the position of the Russian Government, who also signed the conventional forces in Europe treaty but who have completely ignored its provisions, to deploy extra tanks and troops on Russia's southern flank? Russia is also engaged in trying to sell to Iran nuclear reactors capable of producing plutonium.

Mr. Hurd: My hon. Friend is, of course, right. One needs the treaty, but one needs also the performance—and that does not necessarily follow the treaty. I cited earlier North Korea and Iran, because we are concerned about the extent to which the treaty is observed in practice in those countries. However, without the treaty, one does not have a leg to stand on in talking to such countries.
I have no reason to doubt Russian good faith, but we and the Russians have a problem in respect of the CFE treaty. I share my hon. Friend's concern about Russia's transactions with Iran, which have to some extent been whittled down as a result of President Clinton's visit to Moscow. Nevertheless, we all continue to feel anxiety about that aspect.

Mr. Harry Cohen: The treaty requires nuclear weapon states to move towards disarmament. Now that the Government have the indefinite extension that they wanted, how will the disarmament process work? The Defence Select Committee said that Trident was a significant enhancement of the UK's nuclear capacity. If the Foreign Secretary is not to call that Committee a bunch of liars—and I hope not—how will we meet our disarmament obligations?

Mr. Hurd: The wording was negotiated with some difficulty and is important. We undertook to take part in working towards a global reduction. It is clear in common sense that the first steps must be taken by countries that have hugely the greatest armouries. That is why I used the phrase in New York and today about the thousands of American and Russian weapons coming down to hundreds. That is a reasonable way of looking at the matter.
In 1998, by comparison with the 1970s, there will be a 59 per cent. reduction in the total explosive power of our deterrent, or 62 per cent. if one leaves maintenance and other stocks out of the calculation. That substantive reduction takes account of the abandonment of nuclear free-fall bombs. No one can seriously argue, unless they


are beneath-the-skin devotees of unilateral disarmament, that our deterrent plans can be substantially reduced and yet maintained.

Mr. Iain Duncan Smith: Now that the treaty has been agreed and signed, does my right hon. Friend acknowledge that the real problem lies with those countries that would proliferate? China, which has just exploded a nuclear device, and North Korea are at the apex, but many scientists are prepared to sell their expertise to countries that have the money, such as Iran. Does my right hon. Friend agree that the real issue is what the west is prepared to do to deter countries that would obtain the technology, develop nuclear weapons and proliferate? Has he established any mechanism for discussing that matter?

Mr. Hurd: We consider problems case by case. They certainly exist. China is a nuclear power, so yesterday's test will not be particularly surprising to my hon. Friend or anybody else.
As regards North Korea, there is an agreement with the United States to freeze, and later to dismantle, its nuclear programme. So far, that has been implemented—I emphasise the words "so far".
As for nuclear "professors", of course that is a real problem, particularly out of the Soviet Union, but it is one on which the Russian Government—and all of us—keep a close eye, case by case. So far, the consequences have not been as dangerous as predicted. But my hon. Friend is perfectly right: whether we talk about plutonium or expert knowledge, these are lines of watchfulness that must be carried through.

Mr. Tam Dalyell: In his statement, did we not hear the Foreign Secretary claim that we were working closely with our European Union partners? How come, then, that three members of the EU declined to support any declaration praising Britain and France for our nuclear efforts?
What is being done about French testing in the south Pacific? Should we not give the same support to the Australians, in whose area the testing is being done, as many people in Britain gave the Canadians in the fishing dispute? Why should the Pacific be made filthy by our partners? If we have influence in the Union, why do we not use it?

Mr. Hurd: Just as our decision about testing was essentially one for us, so the French decision is one for them. We decided that we no longer need tests in the Nevada desert for the safety of our deterrent—we think there are ways that can be achieved without testing. It was not an easy decision, but we took it on the best advice.
What we aim for—this is true of France and China—is an indefinite ban on testing by which all will abide. The French have the same objective. After the success in New York we need to move forward to get precisely such an agreement.

Mr. Oliver Heald: Does my right hon. Friend agree that the indefinite extension of the treaty is a tremendous success and a vindication of the Government's policy of negotiating from a position of strength? Does he share my concern at the fact that Opposition Members are talking yet again about making one-sided concessions with nothing in return—the old CND, old Labour party? Does he agree that the world is

a safer place because the Government ignored such advice during the 1980s? Will my right hon. Friend continue to ignore it and stand up for Britain's interests?

Mr. Hurd: I think that the hon. Member for Livingston (Mr. Cook) and some of his hon. Friends may want to draw a line of forgetfulness under what they have been saying in the past few weeks. They have been proved wrong: my hon. Friend's analysis has been proved right. The only explanation for the excursion by the hon. Member for Livingston into this field has been a dim but fond recollection of the days when he said that Britain should immediately disengage from the nuclear arms race, and that it was nonsense on stilts for Britain to pretend to be a nuclear power. He has had a little nostalgic dream about the fond days of the past when he had a powerful voice but no responsibility. Now, albeit in a shadow way, he has responsibility—and on this occasion he has forgotten it.

Mrs. Margaret Ewing: Of course we all welcome the extension of the treaty, but I would caution the Foreign Secretary that many of us are impatient to see its aims fully implemented.
Will the documents agreed by consensus and to be placed in the Library be backed by a clear list of the countries that assented to or dissented from the consensus, together with the arguments used in each case? Was a baseline set and a timetable laid out for the multilateral negotiations that are to take place once Russia and America agree to reduce their warhead numbers to the minimum deterrent level of the United Kingdom?

Mr. Hurd: The answer to the hon. Lady's last question is no. The matter was carried as far as I have explained to the House. I shall see, in answer to the first part of her question, what can be given to her and the House—but the point about a consensus is that everybody agrees.

Mr. Gary Streeter: Is my right hon. Friend aware that the news that Britain will be retaining its nuclear deterrent will be widely welcomed by all patriots who recognise, albeit reluctantly, that nuclear weapons cannot be uninvented? Does he share my concern that it is obvious from what Opposition Members have said today that the Labour party's commitment to Trident is paper-thin and, in the unlikely event of Labour forming the next Government, they would scrap Trident, leaving Britain unprotected and throwing 4,000 Plymouthians, whose jobs depend on the Trident submarine, out of work?

Mr. Hurd: The honest answer to my hon. Friend's question is that nothing about the Opposition's policy on these matters is clear. I thought that it was clear. I really did think until a few months ago that we had a consensus in favour of the Trident programme from all parties in the House. If there were such a consensus, it would be greatly to Britain's advantage. Since then, there has been a lot of cloudiness and a good deal of rowing back and nostalgia for the good old CND days. We look for a clear declaration to sort these matters out.

Mr. Robert N. Wareing: What encouragement does the Secretary of State believe that he gives to non-nuclear states to stay non-nuclear when he refuses to rule out the first use of our nuclear weapons against a non-nuclear power?

Mr. Hurd: That is the argument that the Opposition put before we achieved this agreement. Now that we have


achieved this agreement, the hon. Gentleman's argument is clearly out of date and wrong. We achieved the agreement without making the concession that he urged on us.

Mr. Neil Gerrard: The Foreign Secretary referred several times to putting our nuclear weapons into multilateral talks when the United States and Russia have reduced their weapon levels to a level similar to ours. Is not the truth of the matter that, on any likely time scale, that will probably happen after Trident has become redundant? So he is saying that Trident will never become part of any multilateral negotiations and that for the next 25 years we will carry on saying to people in the rest of the world who do not have nuclear weapons, "Don't do as we do, do as we say"?

Mr. Hurd: The basis of the treaty which has now been indefinitely renewed is the distinction between the five nuclear powers and the non-nuclear powers. That is a matter of history. It is also a matter of fact that, even when START 2 is implemented, British nuclear forces will be considerably less than 10 per cent. of the total nuclear forces available to the United States or Russia. Those are the two countries with the huge armouries.
That is why it is reasonable for us and for the French to say that a world in which American and Russian nuclear forces were no longer counted in thousands but in hundreds would be one where we would be ready to join in multilateral negotiations on the global reduction of nuclear arms. That is a reasonable position. It is not reasonable to ask us, as the Opposition did, to move earlier than that on the subject. They said that only if we moved earlier would we get the indefinite extension of the treaty, and they have been proved wrong.

Mr. Jeremy Corbyn: What criticisms were made during the conference, particularly by the Government of Mexico, to the effect that Britain's building, extending, arming and commissioning of the Trident submarine fleet is a breach of the non-proliferation treaty? It is an enormous extension of the seaborne nuclear fire power. Would not Britain's greatest contribution now be to announce that it will decommission its nuclear weapons as part of a progress towards a nuclear-free world?

Mr. Hurd: I think that I have answered that question several times. Whatever the Mexicans may say, most people in the House believe that it is in our national interest to have a minimum national deterrent. It was argued that we could not sustain that and renew the treaty indefinitely. We have managed to do so.

Mr. Paul Flynn: Has the Foreign Secretary drawn a line of forgetfulness under the written answer that he gave me on 5 April 1990 when, in reply to a request from me to beef up the IAEA inspections of the Iraq nuclear weapons programme, he said that Saddam Hussein was a signatory of the non-proliferation treaty and, as such, the Government had full confidence that he would abide by his international obligations and not work on developing nuclear weapons?
Happily, the Gulf war intervened, or Saddam Hussein would have those nuclear weapons from those three programmes that he was developing despite the NPT. Can

the Foreign Secretary give us a guarantee today that the 30 unstable nations in the world that have intercontinental ballistic missiles, which in many cases are run by malign dictators, are not hoodwinking us and the IAEA inspectors in the same way as Saddam Hussein did?

Mr. Hurd: Saddam Hussein certainly did do that. It has now been corrected—but at great cost, as the hon. Gentleman rightly points out.
A number of states have not signed the treaty. The hon. Gentleman knows which they are. Obviously, it is desirable for them to do so. A number of states have signed, but we are suspicious about their intentions: I have mentioned two in the House today. That is why we accept that the safeguards of the IAEA should be strengthened, and when there is a considered and costed programme we are prepared to support it.

Mr. John Hutton: I welcome the extension of the treaty, but will the Foreign Secretary tell us his view of the legal status of the declaration of principles and objectives that has accompanied its renewal? In particular, what new legal obligations on the United Kingdom Government will result from the extension in relation to a comprehensive test ban treaty and progress towards the global elimination of nuclear weapons?

Mr. Hurd: We have given undertakings on both points. I stated those undertakings in New York, and have reported them to the House. They are Government intentions, which we have openly declared.
I do not think that I should chance my arm in regard to the legal status of the declaration. It is not part of the treaty; it is alongside it. I think that it would be sensible if I wrote to the hon. Gentleman with a lawyer's answer. I shall make sure that I get it right, and will place the answer in the Library.

Mr. Robin Cook: The Foreign Secretary's reply has clouded the clarity of his opening statement, in which he pointed out that the declaration called for the total elimination of nuclear weapons. He said that he endorsed that declaration; indeed, he even claimed credit for a weighty part in its negotiation.
Unaccountably—although given several opportunities by his own Back Benchers—the Foreign Secretary failed to remind us that his Government are now committed to the total elimination of nuclear weapons. For the avoidance of doubt, will he now tell the House whether he and the Government accept that goal in the declaration and, if so, what specific contribution Britain will make to the elimination of nuclear weapons in the two years that are all that remain to the Government, who will then be out of office?

Mr. Hurd: The hon. Gentleman has misquoted me slightly, but only slightly. I reported to the House that the programme of action on disarmament in the declaration stresses the importance of, among other matters, the determined pursuit by the nuclear weapon states of systematic and progressive efforts to reduce nuclear weapons globally, with the ultimate goal of eliminating those weapons. That is true, and it has been true ever since the treaty was signed.
During these exchanges, I have repeatedly answered questions from Opposition Members about how we intend to set about that. What I said about the hundreds of


weapons in the United Kingdom and the thousands of weapons possessed by the United States and Russia is the answer to the hon. Gentleman's question.

Criminal Cases (Evidence Disclosure)

The Secretary of State for the Home Department (Mr. Michael Howard): With permission, Madam Speaker, I would like to make a statement on disclosure of evidence in criminal cases.
The extent to which the law requires the prosecution to disclose evidence in advance of trial has caused increasing concern. It has become more and more apparent that the current arrangements do not serve the interests of justice, and are in need of reform. Today I am publishing a consultation document that sets out the Government's proposals for reforming the law. Subject to that consultation, we intend to legislate to put them into effect as soon as a suitable opportunity occurs.
The current disclosure requirements have given rise to the following problems. First, the sheer volume of material to be disclosed and copied to the defence places a very heavy burden on the police and the prosecuting authorities. The prosecution must make available to the defence large quantities of material, at great expense, much of which may not be relevant to the real issues in the case.
Secondly, under the current arrangements it is difficult to protect from disclosure sensitive material such as the identity of an informant or undercover police officer. The current rules often require disclosure to be made in cases where the actual relevance of that sensitive material may be marginal at best. Disclosure of the identity of an informant may place the informant's life in danger. The prosecution may have to choose between taking that appalling risk and abandoning the case to protect the informant, however strong the other evidence in the case may be.
Let me give an example to illustrate that point. Three individuals were arrested in possession of a number of incendiary devices with which they intended to damage a vehicle used for transporting animals. The evidence against them was overwhelming. Unknown to the police who arrested them, intelligence files were held centrally on the organisation to which the defendants belonged. None of that information was to form part of the prosecution case at the trial, but the trial judge ruled that those files should be disclosed to the defence. Since that would have compromised future investigations, the prosecution decided to offer no evidence rather than comply with the ruling. One of the defendants commented in a statement to the media:
It was our intention to remove the animals from this vehicle and then damage it. The only reason this trial collapsed was because the prosecution refused to reveal to our defence lawyers material about us held on computer by the police.
Thirdly, the defence is generally not required to disclose anything about its case before the trial. The presentation of a defence at the last minute, with no advance warning to the prosecution, does not contribute to justice. The fact that the defendant has the opportunity to examine the whole of the evidence produced by the prosecution without having to give any indication of his case in advance encourages the manufacture of false defences. That serves to defeat the interests of justice.
The Royal Commission on criminal justice considered what might be done about the current disclosure requirements. The scheme that it devised provides a basis


on which we can build. We agree with it that a statutory disclosure scheme is needed, with the main elements set out in primary legislation underpinned by rules or a code of practice. We also agree with the idea of a phased approach to disclosure, under which the prosecution would disclose certain material at the first stage, the defence would then disclose something of its own case, and additional prosecution disclosure would be related to what the defence had disclosed.
But the test for initial prosecution disclosure that was proposed by the royal commission is very wide-ranging, and would not significantly reduce the current burdens on the police and the prosecuting authorities. The proposals for defence disclosure made by the royal commission are so general that they would not be of any real benefit in narrowing the issues in dispute. In fairness to the royal commission, it did not set out to devise a detailed solution to the problems of disclosure. That is the task of the Government, and it is to the Government's proposals that I now turn.
The task that we have set ourselves is to put in place a system that will reduce the burden of the current disclosure requirements without denying to the defendant access to material to which he should be entitled in the interests of justice. The scheme that I shall set out today would require the investigator to preserve any material gathered or generated during the criminal investigation that led to the charges against the defendant. It would then require the prosecutor to serve on the defence the material upon which he intends to rely at the trial, and also to disclose unused material in his possession, which might undermine the prosecution case.
For example, if part of the prosecution case is a statement by a witness that he saw the accused near the scene of the crime shortly after it was committed, it will be necessary to disclose a statement by another witness that he saw a person of a different description from the accused at the same time and place.
That test for prosecution disclosure is more limited than the current test. It is focused on what the prosecutor knows about the weaknesses in his own case. It does not require him to guess what the defence might be and to disclose anything that may be relevant to any possible defence. The test would also protect sensitive material more effectively than at present. In many cases, information from an informant or the pictures obtained from surveillance equipment are ancillary to the prosecution case and are not needed to prove the charges against the defendant. Such material tends to support the prosecution case rather than to undermine it. Under our proposals, the prosecutor would not need to disclose such material, nor would he need to apply for a court order to protect it.
The second stage in the process would be a requirement for the defendant to provide sufficient particulars of his case to identify the issues in dispute between the defence and the prosecution before the start of the trial. That should include the name and address of any witness whom he proposes to call. That will narrow the issues in dispute and enable the prosecutor to assess whether there is any additional undisclosed material that might assist that defence. If there is, the prosecutor would then be required to disclose it.
This system will work only if there are sanctions to enforce it. The defendant might simply refuse to disclose any details of his defence. If that happens, the prosecution

will be entitled to comment on that failure at trial, and the court will be able to draw whatever inference seems appropriate from it.
That approach will not penalise the defendant who has a genuine defence, who is prepared to disclose it in advance and who maintains it at the trial; nor does it affect the principle that it is the duty of the prosecution to prove the guilt of the defendant beyond reasonable doubt. No defendant will be compelled to incriminate himself. As with the existing provisions on inferences from silence, no one will be convicted simply on the basis of an inference drawn by the court from the response of the defence.
I have set out our proposals in detail in a Command Paper that I have published today. I have placed copies in the Library of the House.
The proposals extend to England and Wales only. My right hon. and learned Friend the Secretary of State for Northern Ireland will be publishing a paper inviting views on the introduction of a similar scheme in Northern Ireland.
There can be no doubt that the current arrangements have undermined public confidence in the criminal justice system by creating a gap between law and justice. My aim is to close that gap. The proposals should prove more effective in convicting the guilty, while continuing to protect the innocent. I commend them to the House.

Mr. Jack Straw: The Home Secretary is well aware that, for some time, the current wholly inadequate state of the law on disclosure has been a matter of great concern in this country and in the House. He will also be aware that my right hon. Friend the Leader of the Opposition expressed strong support for the royal commission's proposals when they were originally made two years ago, that my hon. Friend the Member for Cardiff, South and Penarth (Mr. Michael) moved amendments during the passage of Criminal Justice and Public Order Bill seeking better to regulate defence and prosecution disclosure, and that I made proposals to deal with the issue in a speech on 5 April this year to the Police Federation and the British Transport police at their meeting in Southport. The Secretary of State's conversion to the arguments that we have been making for more than two years is therefore welcome.
Public confidence in the criminal justice system is wholly undermined if there is a perception that its procedures and rules inhibit the quest for the truth and result in the innocent being convicted or in the guilty going free. There is widespread public impatience with the present trial process in England and Wales, and a feeling that too much of the system may resemble a game and too little a serious examination of the truth.
Although the overwhelming principle of the criminal justice system must be the protection of the genuinely innocent, does the Secretary of State accept that the whole process of police investigation and the conviction of the guilty would grind to a halt if the identity of informants, sites of surveillance and the identities of members of the public, who often courageously assist such police work, are routinely and gratuitously disclosed to the defence, even though it is not probative of the prosecution case?
Does he further accept that, so great is the current confusion in the law, that, in addition to the examples that the Secretary of State gave, there are a great many other examples of well-founded prosecutions of serious


criminals such as armed robbers having to be withdrawn because of the risk to informants' lives or the sites of surveillance, and that there are other occasions when police investigation not probative of the prosecution case could be compromised?
Does the Secretary of State accept that, given that there is a consultative period of almost three months, it would be better if time were taken to reflect on his detailed proposals? May I ask him four specific questions? First, will he give an idea of the time scale that he has in mind for primary legislation? Is it intended to legislate in the next Session of Parliament?
Secondly, relating to that, how does the Secretary of State's time scale in the document relate to the publication and then consideration by the House of the Scott inquiry into the sale of arms to Iraq? As the right hon. and learned Gentleman will know, part of that inquiry deals crucially with the issue of public interest immunity certificates signed by Secretaries of State, which is one means by which relevant evidence can be kept from the court and from the jury.
Thirdly, the Secretary of State said in his statement that there would be a requirement for the defence to disclose the name and address of any witness whom he or she proposed to call. Does he accept that such a requirement could be open to abuse by the prosecution, so mere will be strong grounds for there to be safeguards by way of rules about the circumstances, if any, in which such defence witnesses should be approached by the police or the prosecuting authorities?

Mr. Oliver Heald: That is always done in respect of alibis.

Mr. Straw: I hear what the hon. Gentleman said, but that is a special circumstance to which the Secretary of State referred.
Fourthly, does the Secretary of State recognise that, while there is no doubt that a new system is needed—something about which I have spoken at length—it is essential that we get the balance right between the needs of the prosecution and the rights of the defence? If we do not, rather than being faced with a strengthening of the process, we shall be faced in future years with more miscarriages of justice. Will the Secretary of State bear it in mind that almost every notorious miscarriage of justice that has come to public attention in recent years has involved a failure of the prosecution at some stage to disclose material evidence?
The Secretary of State said that there would be an obligation on the prosecution, for example, to disclose the statement by another witness that he or she saw a person of a different description from the accused at the same time and place. That is welcome. The Secretary of State also said that there should be sanctions in order to ensure that the system operated. Does he accept that sanctions must apply to the prosecution as well as to the defence and that, where there is a wilful failure by the police or the prosecution to disclose relevant evidence of the type of which he spoke, that should be a matter for the disciplinary rules of the police and the prosecuting authorities and should, in some cases, be made a criminal offence?

Mr. Howard: I am grateful to the hon. Gentleman for what I took to be his general welcome for the thrust of the proposals. He asked four specific questions. On the

time scale for legislation, he will understand that I cannot go beyond what I said in my statement, which is that, subject to the consultation exercise, we intend to legislate as soon as a suitable opportunity occurs.
As I have no idea what will emerge from the Scott inquiry, the hon. Gentleman will understand that I cannot answer his question about any relationship between what may emerge from the report of that inquiry and these proposals. It must remain entirely a matter for speculation as to whether there will be any relationship between any recommendations in the report and these proposals.
I agree with what was said by my hon. Friend the Member for Hertfordshire, North (Mr. Heald), albeit from a sedentary position, about the requirement for the defence to disclose the names and addresses of witnesses. That is already a requirement in the context of an alibi defence. We propose to build on that and to adopt a similar approach to that which already exists in that context. Therefore, I see no great difficulty there.
Of course we must seek the right balance between the needs of the prosecution and the rights of the defence. We have not had that balance in the past. The system has been weighted too much in favour of the criminal and against the protection of the public, and it is that imbalance which I sought to put right in the Criminal Justice and Public Order Act 1994 and in these proposals.
The hon. Gentleman began his contribution in an extraordinary way. He sought to take credit for having thought of these things first. He talked about the proposals that he put forward in his speech to the British Transport police on 5 April. It would be as well if I reminded the House what those proposals were. He proposed that the matter be sent to the Law Commission. That was the extent of the hon. Gentleman's proposals on 5 April.
As for the amendment moved by the hon. Member for Cardiff, South and Penarth (Mr. Michael) in the Standing Committee debating the Criminal Justice and Public Order Bill, it was not moved as a free-standing change to the law but, as he made absolutely clear when he was moving it, as an alternative to the Government's proposals to provide for inferences to be drawn from the right to silence. He said that the Committee had
a choice between the Government's proposal to abolish the right to silence"—
he got that wrong—
and the Opposition's alternative".—[Official Report, Standing Committee B, 1 February 1994; c. 351.]
Perhaps the hon. Gentleman will tell us whether he still opposes our proposals on the right to silence or whether he now joins the Government, the police and the Lord Chief Justice, who all think that the changes to the law are sensible, balanced and reasonable.

Sir Ivan Lawrence: Just as my right hon. and learned Friend has already dealt with miscarriages of justice involving the conviction of the innocent, so he is now dealing with those involving the acquittal of the guilty. I think that most people will support the broad thrust of the proposals. In particular, both sides in a criminal trial will welcome any provision that reduces the mass of paper that currently flies about in all directions at great public expense. Also, most people will agree that the defence ought to expose the broad nature of the defence ahead of the trial so that the issues can be narrowed down and the trial shortened.
Some care must be taken, however, to provide safeguards when the defence has to disclose the names and addresses of potential witnesses, not all of whom are necessarily people of clean and impeccable background and who might be deterred from giving evidence in the first place, which would be in conflict with justice. There must be protection, and it is not enough for my right hon. and learned Friend to say that we already have that requirement in respect of alibis, because in those circumstances the courts do not require the alibi notice to be given effect in the course of a trial if they do not think that justice will be done. If my right hon. and learned Friend does not want the courts to circumnavigate his proposal, appropriate safeguards must be established.
I welcome the fact that this is a consultation document from which, we hope, all kinds of recommendations will flow and be heard before legislation is implemented.

Mr. Howard: I am grateful to my hon. and learned Friend for his general support of the proposals. He of course brings considerable experience and expertise to bear on his consideration of these matters. I note what he says about the proposal that the defence should be required to make available the names and addresses of witnesses. I do not entirely share his concerns in that respect, but he is quite right to point out that the document is to be the basis of a consultation exercise and I shall, of course, listen carefully to all the issues raised during the consultation exercise.

Mr. Simon Hughes: I join the general response being given to the Home Secretary's proposals. They go in the right direction, and it is clearly correct that there should be a royal commission set of recommendations, a consultation paper and, eventually, legislation.
The idea that the defence must also assist in the trial and not keep its hand secret to the last is not only right but meets the public's desire to secure a more correct balance.
The matter that probably needs the most careful adjudication—a matter on which the right hon. and learned Gentleman touched and to which he is clearly alert—is that of who determines what material gathered or held by the prosecution may or may not be relevant to the defence and is required to be seen in advance by the defence.
There is, of course, a difference between incidentally held material, as in the example that the Home Secretary gave, which should not be disclosed, and material gathered in the course of investigating a case, which the prosecution may not regard as relevant either to support or undermine the case, but which the defence should see in order to ensure that it knows the full range of the case assembled against it. If that matter can be adjudicated fairly, there will further grounds for belief that the balance will be far better in future.

Mr. Howard: I am grateful to the hon. Gentleman for his support for the proposals. I understand the point that he made. He has put his finger on the heart of that part of the set of proposals which will need the most careful consideration. I would suggest to the hon. Gentleman, and I hope that he will accept, that the requirement on the defence to identify the essence of its defence will help to achieve a proper resolution of the considerations to which

he referred. It will help to achieve a better balance in the interests of justice. I entirely agree, however, that we shall have to consider the matter very carefully in the light of the views expressed in the consultation exercise.

Several hon. Members: rose—

Madam Speaker: Order. Before we proceed, I remind hon. Members that I have to keep in mind the other business that the House has to conduct today. Therefore, I ask for brisk questions and brisk answers so that we might move on to other business fairly soon.

Mr. Julian Brazier: In strongly welcoming the proposals, may I urge my right hon. and learned Friend to look again at section 78 of the Police and Criminal Evidence Act 1984, which is being used to introduce an agent provocateur argument through the back door? Even with the new guidelines, it could still be used to deny juries the opportunity to hear the evidence because the prosecution needs to protect an informer.

Mr. Howard: I shall certainly give my hon. Friend an undertaking to look at that section, and I am grateful for the welcome that he gave the proposals.

Mr. John Fraser: Given escalating costs of criminal defence, will the Home Secretary think twice before introducing disclosure provisions for summary trials, most of which end in convictions in any event? The effect of the proposals in that case would be only to lengthen the process and add to the expense. Is not non-disclosure the crucial issue? Of course we must protect people from intimidation in a society of guns and great amounts of money, but the crucial issue is surely who makes the decision about disclosure and what the sanctions are if he or she gets it wrong.

Mr. Howard: I am not sure that I share the hon. Gentleman's concerns about cost. We are all, of course, concerned about cost, but I hope that the effect of the proposals, relieving as they do the police and the prosecution from the voluminous burdens placed on them, will be to reduce the costs of criminal trials. That is one of the questions on which I specifically invite views in the consultation paper. I take the hon. Gentleman's point about the importance of proper disclosure being made by the prosecution. That is, of course, as he is quite right to say, at the heart of the proposals.

Mr. James Couchman: My right hon. and learned Friend will be aware that his announcement is very welcome news. He will also be aware that several of our Kent colleagues and I have been conveying to him the views of our chief constable on the question of disclosure. Is he confident that his proposed steps will meet the various concerns of the police as they have been represented to him? There is no doubt whatever that the acquittal of serious criminals—because of the disclosure procedures heretofore—is a major affront to the criminal justice system.

Mr. Howard: I am grateful to my hon. Friend for his support. Indeed, I am aware of the views of the chief constable of Kent, not only through representations made by my hon. Friend and other colleagues from Kent, but because the chief constable personally has left me in no doubt of his strong views on the matter. I am not able to report to the House the chief constable's reactions to the


proposals, but the president of the Police Superintendents Association of England and Wales has already given them a very warm welcome.

Mr. David Trimble: I am sure that the Home Secretary realises that the proposals are broadly welcomed by myself and my colleagues. He is quite right that the high volume of material can simply lead to mistakes. I became aware of a case in my constituency in recent weeks of a mistake enabling a terrorist organisation to issue direct threats to witnesses, notwithstanding ceasefires.
May I query the procedures with regard to Northern Ireland? Does the Home Secretary realise that, on this matter, the legal system and the law in Northern Ireland are not significantly different? I must therefore query why we must have a separate consultation exercise. Cannot the two proceed in tandem? Cannot the changes be made by one piece of legislation, as is happening with the Criminal Appeal Bill? As he knows, during consultation on that Bill, practitioners in Northern Ireland said that they wanted to be included in the legislation. I worry that a different procedure would enable the Northern Ireland Office to drag its feet, to prevent proper discussion of Northern Ireland matters in the House.

Mr. Howard: I am grateful to the hon. Gentleman for his welcome of the proposals, but I do not think that there is any basis for the strictures that he has passed on the Northern Ireland Office. I have said that my right hon. and learned Friend the Secretary of State for Northern Ireland intends to publish similar proposals for Northern Ireland. The hon. Gentleman will understand that I am not in a position today to give him any assurance about the legislative vehicle for such proposals, but I am sure that it will be the intention of my right hon. and learned Friend, as it is mine, to proceed with due expedition on the matter.

Mr. David Ashby: My right hon. and learned Friend will know that disclosure has reached ridiculous proportions, and that his reconsideration of the subject is welcome. However, he should be mindful of the fact that some of the most notorious cases that have reached the Court of Appeal have resulted from non-disclosure. The Crown Prosecution Service takes a lot of reminding that all its staff and all of us who are prosecutors are administrators of justice, and we must all ensure that justice is done.
One specific matter that I wish to raise is the fact that, despite that great idea about alibis, alibi notices are being ignored. Does my right hon. and learned Friend agree that, if we are to have disclosure by the defence—and that is right—it should perhaps be accompanied by an opening statement by the defence in front of the jury? Would it not assist the jury enormously to hear the prosecution speech and then a defence statement, so that it knew what issues to look for in the evidence?

Mr. Howard: I am grateful to my hon. Friend for his support. His precise suggestion goes somewhat beyond the proposals as they stand, but I am perfectly prepared to consider it in the context of the consultation exercise.

Mr. Chris Mullin: I welcome the Home Secretary's proposals in so far as they are intended to make the criminal trial a process of truth seeking. Does the right hon. and learned Gentleman see that there is a

danger that when the defence case is disclosed in advance, the police or the prosecution may be tempted to try to nobble witnesses—or to "refresh their memories", to use a phrase that I have heard? Does he recall that, in the Guildford case, for example, a key defence witness was seen off by the threat of being charged with the offences with which four innocent people were eventually charged? That disposed of him for 15 years.

Mr. Howard: I do not think that it is at all appropriate to infer from particular cases, however serious, generalised allegations about a propensity on the part of the police to behave in the way that the hon. Gentleman has imputed to them. I do not believe that what he suggests would happen. During the consultation exercise, we can consider the importance of putting in place proper safeguards.

Mr. Michael Stephen: Does my right hon. and learned Friend accept that his proposals will be widely welcomed both in my constituency and throughout the country? It is surely in the interests of justice that both parties to a criminal trial should know what case they have to meet before the trial begins. My constituents are sick and tired of hardened criminals escaping conviction by springing ambush defences on the prosecution.

Mr. Howard: I am grateful to my hon. Friend. I entirely agree with his assessment of the view of the public, and I share that view.

Mr. Mike O'Brien: I, too, welcome the Home Secretary's efforts to deal with what has become the farce of disclosure—both in terms of the volume of material, and because of the way in which witnesses for the prosecution can have their names disclosed to the prejudice of the trial. I was also greatly shocked when a senior police officer told me of a murder case that had to be dropped because of such problems.
The importance of dealing with disclosure lies in the detail. Will the Home Secretary give us the assurance that, both during the consultation process and, more importantly, when legislation comes before the House, he and his fellow Ministers will deal with it in the most bipartisan way possible, so that we can get the detail right and provide lasting rules on disclosure, which will avoid miscarriages of justice, and which can be preserved over a long period as good law?

Mr. Howard: I am grateful to the hon. Gentleman for his support for the proposals. I am perfectly happy to give him the undertaking that both during the consultation exercise and while any legislation is being taken through Parliament, we shall consider the detailed suggestions made in as clear-headed, receptive and objective a way as possible. Our only aim is to achieve the best possible balance and the best possible system of criminal justice. That is what we regard as the ultimate goal of all our endeavours.

Mr. John Greenway: My right hon. and learned Friend knows of my concerns about this matter over many years. Those concerns reflect in particular those of the police about the burdens placed on them by the present arrangements. I am also concerned that, as has been made clear this afternoon, many trials have collapsed as a consequence. Given that the consultation and legislation will take several months, and given that so many of the difficult decisions that have been taken


relating to disclosure seem to be matters of interpretation and discretion by the judiciary, can my right hon. and learned Friend tell the House what arrangements he, my right hon. and noble Friend the Lord Chancellor and my right hon. and learned Friend the Attorney-General might have in mind to improve the guidelines to judges for the current disclosure rules? My right hon. and learned Friend will know that there is still some concern about those guidelines and the way in which they are exercised.

Mr. Howard: My hon. Friend is entirely right to remind the House of the concerns that he has expressed on the matter for a long period, and I am grateful to him for the suggestions that he made. I fear, however, that I cannot respond as positively as I might like to his invitation to issue guidance to the judiciary. It is not a matter for me, nor is it a matter for my right hon. and noble Friend the Lord Chancellor. It is a matter for the courts, the Court of Appeal and perhaps the Lord Chief Justice.

Mr. Tam Dalyell: With the dark horse in the next Secretary of State for Scotland stakes sitting beside him, could the Home Secretary tell the House what the position is in relation to Scottish law, and in particular to disclosure? The right hon. and learned Gentleman will know of the great anxieties that many serious people have over the biggest case of murder against western civilians since 1945—that is, Lockerbie.
In relation to the English responsibilities—since some evidence was found in England—could the Home Secretary look at Mr. Francovitch's film, which appeared last Thursday night, and ask senior officials at the Home Office whether there are any conclusions relating to the non-disclosure of evidence which the Crown Office said it has, as that is a matter that pertains to the Home Office?

Mr. Howard: I am not sure which would be the greater lack of wisdom—to draw inferences from the film to which the hon. Gentleman referred, or for me to try to explain to the House the Scottish law on disclosure. I am certainly aware of my limitations, so I have no intention of responding to the hon. Gentleman's request. I have no doubt that he will raise the matter in due course with my right hon. Friend the Secretary of State for Scotland.

Mr. Nick Hawkins: I very much welcome what my right hon. and learned Friend has said today, and I particularly welcome his response to the royal commission's comments about the need for the prosecution to provide such vast amounts of material for the defence, particularly in cases in which serious professional criminals can comb through that material in the hope of chancing upon something that might provide a defence. That has been an abuse for many years, and I hope that, after the consultation period, my right hon. and

learned Friend will produce legislative proposals to correct that mischief as soon as possible—preferably in the next Session.
On the day when the true attitude of Labour Front-Bench Members has been shown by the attempt of the hon. Member for Brent, South (Mr. Boateng) and his colleagues to compromise the independence of the judiciary by threatening to politicise them, may I once again congratulate my right hon. and learned Friend on ensuring that the guilty are convicted and are not slipping out on technicalities?

Mr. Howard: I am grateful to my hon. Friend for his support. We shall look at the point that he made during the consultation exercise, and I share his views. I do not wish to extend the scope of these questions and answers by referring to the proposals made by the hon. Member for Brent, South (Mr. Boateng).

Mr. Gary Streeter: My right hon. and learned Friend will be aware that much damage has been done to the reputation of the criminal justice system in the past few years by apparently guilty men getting away on legal technicalities. Is he aware that the most important point resulting from his announcement today is that it will start to restore public confidence in the criminal justice system by putting guilty men where they belong—behind bars?

Mr. Howard: My hon. Friend is right to put his finger on that point. We must enhance public confidence in the criminal justice system, and everything that I have sought to do in my two years in this job has been designed to achieve that objective. The proposals certainly will play their part in taking that objective forward.

Mr. Oliver Heald: Does my right hon. and learned Friend agree that the importance of the new procedure is that it will have an impact on every criminal case, by narrowing the issues and reducing the amount of disclosure that is required? It will therefore save time, and make the administration of justice in England and Wales much more efficient. Does he accept that the proposals go further and are far better than the amendments tabled by the Labour party in Committee on the Criminal Justice and Public Order Act 1994? Those amendments did not involve any substantial reduction in the amount of disclosure that has to be made, whereas these proposals do. Will not the photocopiers of the Crown Prosecution Service run more quietly as a result?

Mr. Howard: My hon. Friend is entirely right. In recognition of the inadequacy of the proposals put forward by the hon. Member for Cardiff, South and Penarth in the Standing Committee, the hon. Member for Blackburn (Mr. Straw) decided that, rather than adopting the course suggested by his hon. Friend, he would send the matter off to the Law Commission. The hon. Member for Blackburn was right to recognise those deficiencies, but we have been able to find a satisfactory solution without the further delay that referring the matter to the Law Commission would involve.

Points of Order

Mr. Richard Tracey: On a point of order, Madam Speaker. On a number of occasions, I have heard you speak to the House about the use of House of Commons notepaper and the House's portcullis insignia, and all hon. Members have received guidelines on the matter from the Serjeant at Arms. I have before me a letter to a business man on House of Commons notepaper, which promotes a conference involving leading members of the Opposition Front Bench. The letter is signed by one of those hon. Members. Delegates are asked to pay £295 a head for the conference, which is to be organised by professional conference organisers called Hobsbawm Macaulay Communications Ltd., which is obviously a commercial operation.
It seems to me that that is an abuse of House of Commons paper and insignia. In the light of what Lord Nolan has been saying to all of us in the past few days, surely that is the type of abuse that the House should not allow.

Madam Speaker: The hon. Gentleman was courteous enough to let me have a copy of the item to which he referred, although I have only been able to glance at it. He knows that the supervision and enforcement of the regulations that govern the use of the portcullis and of House of Commons stationery is a matter for the Serjeant at Arms. I would appreciate it if he let the Serjeant at Arms have a copy of the correspondence to which he referred.

Mr. Donald Dewar: On a point of order, Madam Speaker. I understand that an announcement about the jobseeker's allowance was made a short while ago in another place. The other place has

been told that the introduction of the allowance has been postponed from April 1996 to October 1996. I have no idea why that has been done. I do not know whether it is due to a systems failure or administrative problems, or whether it is a political and tactical retreat because of the unpopularity of the legislation. But it seems to me that the House should be told, and I wonder whether you have received any indication from Ministers of an intention to come to the House to explain what is a major development in a sensitive area of policy.

Madam Speaker: I have not been informed that the Government are seeking to make a statement on the matter, but those on the Treasury Bench will have made a note of what the hon. Gentleman said. I understand that, in due course—I cannot tell the hon. Gentleman when "due course" is—we shall be receiving an amendment from the Lords. I understand the hon. Gentleman's impatience at this time.

Mrs. Ann Taylor: Further to that point of order, Madam Speaker.

Madam Speaker: I do not think that there can be anything further to that point of order, as I have made a ruling. I cannot give any more information, although the hon. Lady may have some information to give the House.

Mrs. Taylor: May I seek your guidance? Would it be possible, at a suitable point during today's business—perhaps after a vote—for the appropriate Secretary of State to come to the House to make a statement on the matter raised by my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar)?

Madam Speaker: I am always available to a Minister who seeks to inform me that he wishes to make a statement. If that were the case, I would be here in the Chair to deal with that statement.

Employment of Illegal Immigrants

Mr. Nigel Waterson: I beg to move,
That leave be given to bring in a Bill to make it unlawful to employ an illegal immigrant; and for connected purposes.
Rarely have so many people been on the move across the globe. Millions of people, both economic migrants and genuine asylum seekers, are abandoning their countries and looking for a better, or at least a safer, life elsewhere. It is a problem faced by every advanced country. The recent reimposition of some border controls in "Schengenland" underlines the problem, which must be faced with both firmness and fairness.
How big is the problem? Estimates vary dramatically. The Home Office is quick to point out that there are no official estimates of the number of illegal immigrants in the United Kingdom. The Home Secretary said recently:
by its very nature, illegal immigration is difficult to measure and any estimates would be highly speculative."—[Official Report, 20 April 1995; Vol. 258, 328]
We know that, in 1994, 7,240 illegal entrants were detected and, in the same period, 3,670 were removed or departed voluntarily from the UK. In addition, 4,750 persons were issued with a notice of intention to deport.
Mr. Peter Tompkins, the former chief inspector of the immigration service, claimed that almost 40,000 illegal immigrants enter the UK a year. In his view, immigration officers catch only about one in seven illegal immigrants. There has been a sharp growth in the number of cases from eastern Europe and north Africa and, with 1997 looming, there must be worries about potential immigration from Hong Kong.
One of the most worrying statistics is the extent to which asylum is being abused. In 1994, about 80 per cent. of asylum decisions were outright refusals.
A significant number of those employed in hotels and restaurants, in factories or on farms at harvest time will be illegal immigrants. That is not a problem that any responsible Government could ignore and yet, bizarrely—this is the central thrust of my Bill—it is not an offence at present to employ an illegal immigrant and there is no general requirement on employers to satisfy themselves about the immigration status of their employees.
Of course, it is an offence to assist illegal entry, and it has been held that acts to facilitate entry into the United Kingdom can be pursued under that provision, even once the illegal immigrant has already got through the port of entry and perhaps has even started work.
Another existing offence is harbouring. It is an offence knowingly to harbour anyone who one may know, or have reasonable cause for believing, is either an illegal immigrant or an overstayer, or is in breach of a condition not to work or to register with the police. The offence is triable only summarily, with a penalty of a fine or a maximum of six months' imprisonment and prosecutions are rare.
There is clearly a yawning gap in the law. A statutory requirement should be laid on employers of permanent and casual labour that they must check the immigration status of job applicants. If they are not satisfied, they should refuse to employ them and, ideally, pass the relevant information on to the authorities. I do not believe

that that would be an onerous burden on employers, for I believe strongly in the Government's deregulation initiative.
Taking a lead from the offence of harbouring, the prosecution should have to show that the employer knew or had reasonable cause to believe that the person he employed was an illegal entrant or an overstayer, or was in breach of conditions. That would give the requisite element of what we lawyers call mens rea. Penalties should be tough—heavy fines and a maximum prison term of up to five years. There should also be a right of trial at the Crown court for serious cases.
I am delighted to have seen recently some press speculation that my right hon. and learned Friend the Secretary of State for the Home Department has it in mind to introduce such legislation in the next Queen's Speech.
My Bill calls for one measure, but I recognise that a range of measures are needed to tackle the growing problem. We must continue to operate our own strict border controls, in line with the 1985 European Union declaration. There must be no question of article 7a of the treaty of Rome being allowed to dilute our determination.
Next, we must develop a more efficient and fraud-proof system for the issue of national insurance numbers. We must also continue to crack down on social security excesses. My right hon. Friend the Secretary of State for Social Security has already gone to great lengths to combat fraud and deter so-called benefit tourists. We have to go further.
As I pointed out, the great majority of applications for asylum are bogus. Furthermore, most asylum seekers originally enter this country as visitors or students and on the basis that they will not become a charge on the public purse. It is only later—sometimes a very short time later—that they claim asylum. That entitles them to claim a range of benefits: income support at 90 per cent. of the full rate, housing benefit, council tax benefit and family credit. An asylum seeker is also allowed free medical treatment under the national health service and, if receiving income support, free prescriptions, medical and dental treatment and concessionary eye treatment.
In 1985, 5,060 asylum seekers were awaiting a decision. That figure had risen to 55,000 last year, of which, statistically, 80 per cent. will turn out to be bogus. Yet, as long as those 55,000 are waiting for a decision, they are entitled to all the benefits that I described. The British have always been a fair and generous people, but enough is enough.
Above all, we must press ahead with a compulsory and comprehensive system of identity cards. They will have many benefits, not least in tracking down illegal immigrants and overstayers.

Mr. John Spellar: On a point of order, Mr. Deputy Speaker. None of these issues relate to the Bill as it was outlined on the Order Paper.

Mr. Deputy Speaker (Mr. Michael Morris): The most recent contribution was going rather wide of the Bill, and I hope that the hon. Member for Eastbourne (Mr. Waterson) will return to the specifics.

Mr. Waterson: To return to the central theme of my Bill, I have no doubt that it will provoke some howls of protest from Opposition Members and from some of the organisations that purport to represent the best interests of


ethnic minorities, but I hope that they will come to recognise that the present situation is simply unfair. It is unfair on the indigenous population and it is unfair on legal immigrants—the existing ethnic minorities in this country.
Perhaps above all, it is unfair on those illegal immigrants who are employed in restaurant kitchens, sweatshops and the fields as a modern form of slave labour. They are often paid minimal wages by employers who know that, no matter how harsh the conditions, the workers will not and cannot complain.
Hon. Members may have seen recent press reports about a sweatshop in London employing illegal Turkish workers. Hours are long and conditions basic. There is no canteen and little attempt to ensure health and safety at work. A worker can earn as little as £1.50 an hour and there is no overtime rate. Recently, half the sweatshop's 60 workers walked out in a dispute over piece rates. The Turkish owner called the police and the workers fled—some jumping from second-floor windows. Pay rates for those who remain have been cut in retaliation. We owe it as much to those people as to our own British citizens to put a stop to that sort of practice.

Mr. Neil Gerrard: The Bill could have been made to sound reasonable, at least to some people outside this House who have been fed myths about the extent of illegal immigration and how easy it is to evade controls.
I will speak briefly against the Bill because it foreshadows a debate that we will probably have at greater length in the next few weeks, if some of the reports that have been trailed in the press recently are anything to go by. We have been told that, even now, Ministers are planning to introduce controls and that the Bill, or something very like it, is one of the options that they have considered.
The comment in The Guardian last week summed up what is going on. It said:
Never have the hurdles to enter Britain been so high, yet ministers are even now planning a series of … trip wires to catch the slim numbers of illegal immigrants who do slip through. What's going on? An election is approaching.
That is precisely what the proposed legislation is about. It is being presented as if thousands of illegal immigrants were employed in hotels and sweat shops, but there is no evidence whatsoever to support that claim.

Mr. Nick Hawkins: Will the hon. Gentleman give way?

Mr. Gerrard: No, I wish to be brief.
If it is true—I suspect that it is—that illegal immigrants are working in sweatshops making clothes and the like, the hon. Member for Eastbourne (Mr. Waterson) should have thought of an alternative solution—a minimum wage. Employers would then have no incentive or ability to employ people in sweatshops.
My main concern is what will happen as a consequence of the Bill. If you, Mr. Deputy Speaker, or I were to apply for a job with such legislation in place, we would not be asked about our immigration status for the simple reason that our skin is white, but many of my constituents from Pakistan or the Caribbean—decent, law-abiding British

citizens—will be asked to prove their immigration status. I ask the House to consider what the Bill would do for race relations.
Moreover, how could employers with no expertise in the matter be qualified to make the judgment that the Bill asks them to make? It is not simple to decide someone's immigration status. The result would simply be checks on everyone who is not white, and deteriorating race relations. I do not argue in favour of illegal immigration, although we could argue whether the present immigration laws are fair and reasonable, but that is not what the debate is about.
The Bill is based on prejudice and, if implemented, it would foster prejudice and destroy good race relations. It is a nasty, vicious little proposal, which I hope will get no further in the House.

Question put, pursuant to Standing Order No. 19 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business):—

The House divided: Ayes 74, Noes 65.

Division No. 148]
[5.01 pm


AYES


Allason, Rupert (Torbay)
Jopling, Rt Hon Michael


Ashby, David
Kellett-Bowman, Dame Elaine


Atkinson, David (Bour'mouth E)
Lamont, Rt Hon Norman


Banks, Matthew (Southport)
McLoughlin, Patrick


Batiste, Spencer
Marshall, John (Hendon S)


Bendall, Vivian
Marshall, Sir Michael (Arundel)


Body, Sir Richard
Mills, Iain


Booth, Hartley
Mitchell, Sir David (NW Hants)


Butcher, John
Moate, Sir Roger


Butterfill, John
Molyneaux, Rt Hon James


Carlisle, John (Luton North)
Montgomery, Sir Fergus


Carrington, Matthew
Neubert, Sir Michael


Carttiss, Michael
Pattie, Rt Hon Sir Geoffrey


Clark, Dr Michael (Rochford)
Porter, David (Waveney)


Clifton-Brown, Geoffrey
Powell, William (Corby)


Congdon, David
Riddick, Graham


Coombs, Anthony (Wyre For'st)
Robathan, Andrew


Cope, Rt Hon Sir John
Shaw, David (Dover)


Couchman, James
Smith, Tim (Beaconsfield)


Davies, Quentin (Stamford)
Smyth, The Reverend Martin


Day, Stephen
Spicer, Sir James (W Dorset)


Deva, Nirj Joseph
Spicer, Michael (S Worcs)


Duncan-Smith, Iain
Spink, Dr Robert


Dunn, Bob
Spring, Richard


Durant, Sir Anthony
Tapsell, Sir Peter


Elletson, Harold
Thompson, Sir Donald (C'er V)


Fabricant, Michael
Thornton, Sir Malcolm


Fishburn, Dudley
Townend, John (Bridlington)


Gardiner, Sir George
Vaughan, Sir Gerard


Greenway, Harry (Ealing N)
Walker, Bill (N Tayside)


Griffiths, Peter (Portsmouth, N)
Wardle, Charles (Bexhill)


Hargreaves, Andrew
Waterson, Nigel


Harris, David
Wilshire, David


Hill, James (Southampton Test)
Winterton, Nicholas (Macc'fld)


Howell, Sir Ralph (N Norfolk)
Yeo, Tim


Hunter, Andrew



Jenkin, Bernard
Tellers for the Ayes:


Jessel, Toby
Mr. Nick Hawkins and


Jones, Nigel (Cheltenham)
Mr. John Sykes.


NOES


Ainsworth, Robert (Cov'try NE)
Caborn, Richard


Austin-Walker, John
Campbell, Mrs Anne (C'bridge)


Barnes, Harry
Campbell, Menzies (Fife NE)


Bayley, Hugh
Campbell, Ronnie (Blyth V)


Bennett, Andrew F
Cam, Jamie


Bermingham, Gerald
Clapham, Michael






Clwyd, Mrs Ann
McMaster, Gordon


Connarty, Michael
McNamara, Kevin


Cunningham, Jim (Covy SE)
MacShane, Denis


Dalyell, Tam
Madden, Max


Donohoe, Brian H
Mahon, Alice


Eagle, Ms Angela
Michie, Bill (Sheffield Heeley)


Enright, Derek
Mitchell, Austin (Gt Grimsby)


Etherington, Bill
Morris, Rt Hon Alfred (Wy'nshawe)


Evans, John (St Helens N)
Oakes, Rt Hon Gordon


Gapes, Mike
O'Hara, Edward


Gerrard, Neil
Parry, Robert


Godman, Dr Norman A
Patchett, Terry


Godsiff, Roger
Rendel, David


Gordon, Mildred
Rooney, Terry


Graham, Thomas
Ross, Ernie (Dundee W)


Grant, Bernie (Tottenham)
Sedgemore, Brian


Gunnell, John
Skinner, Dennis


Harvey, Nick
Steel, Rt Hon Sir David


Hughes, Robert (Aberdeen N)
Taylor, Matthew (Truro)


Hutton, John
Tipping, Paddy


Jackson, Helen (Shefld, H)
Wicks, Malcolm


Janner, Greville
Wise, Audrey


Jones, Lynne (B'ham S O)
Wray, Jimmy


Khabra, Piara S
Young, David (Bolton SE)


Lewis, Terry



Livingstone, Ken
Tellers for the Noes:


McAllion, John
Mr. Harry Cohen and


Macdonald, Calum
Mr. Jeremy Corbyn.

Question accordingly agreed to.

Bill ordered to be brought in by Mr. Nigel Waterson, Dame Elaine Kellett-Bowman, Mrs. Angela Knight, Mr. John Marshall, Mr. John Sykes, Mr. Harold Elletson, Mr. Harry Greenway, Mr. Spencer Batiste, Mr. David Shaw, Mr. James Clappison, Mr. Charles Hendry and Dr. Robert Spink.

Employment of Illegal Immigrants

Mr. Nigel Waterson accordingly presented a Bill to make it unlawful to employ an illegal immigrant; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 14 July and to be printed. [Bill 123.]

SITTINGS OF THE HOUSE

Motion made, and Question put forthwith, pursuant to Order [19 December],

That this House, at its rising on Thursday 25th May, do adjourn till Tuesday 6th June.—[Mr. Bates.]

Question agreed to.

Orders of the Day — Gas Bill

As amended (in the Standing Committee), further considered.

Clause 8

STANDARD CONDITIONS OF LICENCES

Amendment made: No. 3, in page 11, line 25, leave out 'and 26(1A)' and insert ', 26(1A) and 27(1A)'.—[Mr. Eggar.]

Mr. Nigel Griffiths: I beg to move amendment No. 52, in page 12, line 41, at end add—
'(3) Standard conditions for gas suppliers shall include a duty on licence holders to take account of the needs of low income customers in laying down methods of payment and procedures regarding debt and disconnection.'.

Mr. Deputy Speaker (Mr. Michael Morris): With this, it will be convenient to discuss amendment No. 53, in page 12, line 41, at end add—
'(3) Standard conditions for gas suppliers shall include a duty on licence holders to provide special services including those services that must be delivered by appropriately qualified home service advisers for meeting the needs of consumers of gas conveyed through pipes who are disabled or aged 60 years and over.'.

Mr. Griffiths: The amendments are important because they concern the role of home service advisers who help elderly, disabled and blind people in their homes. At a face-to-face meeting, British Gas told me that it had to cut the budget in that sector to compete with the new firms that the Government seek to bring into the gas market. British Gas envisages that those firms will set low standards, so it has been forced to cut its services in line with them.
I shall spend a few moments telling the House about the people who will suffer because of those terrible cuts by British Gas. Some 18 months ago, British Gas had more 150 home service advisers, who do not only visit schools and teach children about the value of using gas wisely and safely—an issue of danger of which everyone is well aware, especially people of our parents' and grandparents' generation. More importantly, the British Gas home service advisers have developed an unique role. They visit the homes of elderly, blind and disabled people and ensure that the gas fittings are safe and easy to use.
If, for instance, by some misfortune a constituent should become blind and is a gas user, British Gas will send in a home service adviser at no cost to ensure that the appropriate Braille stickers are stuck onto the controls of the cooker to identify the grill, the oven and other parts of the cooker. For those with the misfortune to suffer from arthritis, which afflicts not just the elderly but younger people too, British Gas will send in a home service adviser with a range of adaptations to help them switch on their cooker. If it has small, fiddly knobs larger ones will be fitted so that the controls can be used more easily. If a heater cannot be operated because the control is at an awkward angle or of an awkward size so that arthritic fingers cannot grasp it, the home service adviser will adapt it as necessary.
The amendments seek to ensure that the service is not only preserved, but extended to those entering the gas market, so that new gas companies which seek to cream


off domestic customers cannot turn their backs on those who are elderly, disabled or blind. That is vital because British Gas has already begun the process.
Some 18 months ago, British Gas employed 136 home service advisers; now there are 78. It has reduced by about 50 the number of home service advisers so that geographical areas covering thousands of square miles of the country no longer benefit directly from that service. Last autumn, British Gas took away from Inverness, Aberdeen and the north of Scotland the only home service adviser based there. Now, if someone requests that service from British Gas, somebody from Perth, Edinburgh or Glasgow has to travel 100 or 150 miles to Inverness or to Thurso in the north of Scotland. A service that people took for granted a year ago has been cut by British Gas which told me and the Minister that it can no longer afford the £30 million to finance that and other related service.
The amendments seek to ensure that the service is restored. The cuts in Scotland from 10 home service advisers 18 months ago to four now has been universally reflected throughout the United Kingdom. There are now no home service advisers on call in many constituencies. The service may be provided after some delay. If British Gas internal papers are to be believed, it may be provided at a cost, and British Gas has floated the cost of £25 for the service. The service may be withdrawn altogether. We believe that unless it is incorporated in the Bill, we may lose that extremely valuable service. We may lose the advice and help that is given by those highly trained key staff who visit people's homes.
The Minister has already said that he wants the service protected, but under his stewardship, albeit remotely, the number of home service advisers has been cut by some 40 per cent. It is all very well for the Minister to stand at the Dispatch Box and promise us that he wants that tremendous service to continue when he has done nothing to stop British Gas cutting it to the bone.
If the Bill is left unamended, elderly, disabled and blind people will no longer be able to rely on a service that allows them to stay in their homes and that is part of community care. Until the Government insisted on further privatisation, British Gas did that job well. In the face of brutal competition, British Gas has slashed its budget and the number of home advisers.
The Minister will be hard pressed to reassure the House that he can redress the balance and ensure that the elderly, the disabled and the blind enjoy an enhanced level of service. We want a guarantee that the number of advisers will be restored to the number that existed as recently as last autumn. Unless the Minister gives that assurance, we will view all his assurances on the Bill with considerable scepticism.

The Minister for Industry and Energy (Mr. Tim Eggar): The hon. Gentleman has gone in yet again for exaggerated rhetoric. It is interesting that, on the day that the right hon. Member for Copeland (Dr. Cunningham) has made a speech allegedly in favour of competition, the hon. Member for Edinburgh, South (Mr. Griffiths) is claiming that the only form of competition is that which preserves in concrete the present situation. That approach is not taken by the Bill. The Government's approach is to maintain or enhance existing standards through licensing. Condition 17 of the gas suppliers licence will require licence holders to provide a series of special services on request and without charge to pensioners and the disabled. Some will require home visits.
There is an obligation to provide on request a free annual safety check of appliances and fittings on the customer's side of the meter. There is an obligation to provide on request a meter reading every quarter when neither the customer nor any other person living with the customer is able to read the meter. There is also an obligation to reposition gas meters. Those are three examples of visits to consumers' homes being required as a matter of practice.
As a general principle, we do not intend to require all gas suppliers to do things exactly the same as British Gas. That is the nature of competition. There may be alternative ways of providing the same or better quality services, which competitors are free to develop and from which customers could doubtless benefit.
The amendment—like so many presented by the hon. Member for Edinburgh, South—seeks to make competition impossible and impracticable. The theme of the Opposition and their amendments is so to curb and confine the area in which competition can occur that there would be no competition. The amendment is the latest and most obvious example of the hon. Gentleman's contributions, and I cannot accept it.

Ms Ann Coffey: The Minister will doubtless say that the terms of amendment No. 52 are already contained in condition 19 of the standard licence. However, it states that, when customers cannot pay,
the arrangements shall in relation to any of the licensee's domestic customers who through misfortune or inability to cope with credit terms for the supply of gas for domestic use incurs obligations to pay for gas for such use which he finds difficulty in discharging provide for".
So, provided that that criterion is met, the supplier is obliged to consider certain arrangements for payment. It broadly continues the present arrangements for protecting consumers in debt but the phrase "misfortune or inability" is curious.
How will such a customer be distinguished? Who will make the judgment that the customer is part of the deserving poor rather than of the undeserving poor? It appears that it will be for the supplier to decide whether the consumer is a can't-payer or a won't-payer and whether the supplier has any obligation to the defaulting customer. Defaulting customers have no effective redress in disputes over their rights. If a supplier decides that a customer is not part of the deserving poor, the customer has no way of making any representations against that decision.
It is procedurally unclear who is obliged to take the initiative in bringing the appropriate arrangements into play. Will it be for the supplier to investigate or for the consumer to make his or her case when a debt has accumulated? The conditions leave it to the supplier to nominate conditions of supply, having made the judgment that an individual is part of the undeserving poor. That leaves customers with few rights. The director general would not be involved in any such disputes.
Amendment No. 52 is important in placing an obligation on the director general to make certain that the licence conditions are discharged. Perhaps the director general could intervene in disputes between suppliers and their customers over the terms on which gas is supplied. Although condition 19 is part of the social obligation, its


drafting is unclear. I presume that the Minister will not accept the amendment but I would like to hear his response to my comments.

Mr. Nigel Griffiths: I had expected the Minister to take the opportunity to persuade the House. He ducked the key issue of why it was right for British Gas to cut the number of home service advisers from 136 to 78, and he did not dwell on the valuable function performed by those advisers. The Minister commented on the lunchtime remarks by my right hon. Friend the Member for Copeland (Dr. Cunningham), in which I had a hand. The hon. Gentleman stated that his view of competition is not the same as ours. I say, "Hear, hear" to that. The Minister's approach is to make sure that the elderly or disabled go to the wall. That is the guiding principle of the Government of the day. If we support competition, it will not be at the cost of the poor, elderly, blind or otherwise disabled. If that is the clear blue water between Labour and the Conservative party, I am happy to be standing on this shore, not that one.

Amendment negatived.

Clause 15

MINOR AND CONSEQUENTIAL AMENDMENTS

Amendment made: No. 55, in page 16, line 31, after 'enactments', insert 'and instrument'.—[Mr. Eggar.]

Clause 17

SHORT TITLE, COMMENCEMENT AND EXTENT

Amendments made: No. 56, in page 17, line 11, at end insert—
'( ) Without prejudice to section 13 of the Interpretation Act 1978 (anticipatory exercise of powers), any power conferred on the Secretary of State or the Director by a provision of this Act which comes into force by virtue of subsection (2) above may be exercised before the appointed day provided that nothing done in the exercise of that power has effect before that day.'.
No. 15, in page 17, line 15, after 'Act' insert
', except this section, subsections (1) to (6) of section 11 and paragraph 15 of Schedule 5,'.—[Mr. Eggar.]

Schedule 2

THE GAS CODE

Amendments made: No. 57, in page 19, line 27, leave out
'premises owned or occupied by him'
and insert 'particular premises'.
No. 58, in page 19, line 32, after first 'gas', insert 'conveyed to his premises'.
No. 59, in page 19, line 33, leave out 'his' and insert 'those'.
No. 60, in page 21, line 27, leave out 'Sub-paragraph (3) below applies' and insert
'Sub-paragraphs (3) and (3A) below apply'.
No. 61, in page 21, line 41, at beginning insert
'If no other gas supplier has become a relevant supplier,'.
No. 62, in page 21, line 45, at end insert—
'(3A) If—

(a) another gas supplier has become a relevant supplier ("the new supplier"); and

(b) the supplier has assigned to the new supplier his right to recover the charges due to him from the consumer,

sub-paragraph (3) above shall apply as if any reference to the supplier were a reference to the new supplier.'.
No. 63, in page 21, line 46, leave out from beginning to 'shall' in line 48 and insert
'Sub-paragraphs (3) and (3A) above shall have effect subject to any restrictions imposed by conditions of the supplier's licence or, as the case may be, the new supplier's licence; and the powers conferred by those sub-paragraphs'.
No. 64, in page 22, line 7, at end insert—

'Deemed contracts in certain cases

7A.—(1) Where a gas supplier supplies gas to a consumer otherwise than in pursuance of a contract, the supplier shall be deemed to have contracted with the consumer for the supply of gas as from the time when he began so to supply gas to the consumer.
(2) Where—

(a) a gas supplier ceases to supply gas to a consumer by reason of his ceasing to be the owner or occupier of any premises; and
(b) otherwise than by arrangement with the supplier or another gas supplier, a new owner or occupier of the premises takes a supply of gas,

the supplier shall be deemed to have contracted with the new owner or occupier for the supply of gas as from the time when the new owner or occupier began to take such a supply.
(3) Sub-paragraphs (1) and (2) above shall not apply in any case where gas is supplied or, as the case may be, a supply of gas is taken at a rate which is reasonably expected to exceed 75,000 therms a year.
(4) If a gas supplier at any time so elects, sub-paragraph (3) above shall have effect, so far as relating to him and to supplies begun to be made or taken after that time, as if the reference to 75,000 therms were a reference to 2,500 therms.
(5) If a gas supplier at any time withdraws an election under sub-paragraph (4) above, sub-paragraph (3) above shall have effect, so far as relating to him and to supplies begun to be made or taken after that time, without the modification made by sub-paragraph (4) above.
(6) The express terms and conditions of a contract which, by virtue of sub-paragraph (1) or (2) above, is deemed to have been made shall be provided for by a scheme made under this paragraph.
(7) Each gas supplier shall make, and from time to time revise, a scheme for determining the terms and conditions which are to be incorporated in the contracts which, by virtue of sub-paragraph (1) or (2) above, are to be deemed to have been made.
(8) A scheme under this paragraph may make different provisions for different cases or classes of cases determined by, or in accordance with, the provisions of the scheme.
(9) As soon as practicable after a gas supplier makes a scheme under this paragraph, a revision of such a scheme, an election under sub-paragraph (4) above or a withdrawal under sub-paragraph (5) above of such an election, he shall—

(a) publish, in such manner as he considers appropriate for bringing it to the attention of persons likely to be affected by it, a notice stating the effect of the scheme, revision, election or withdrawal;
(b) send a copy of the scheme, revision, election or withdrawal to the Director and to the Council; and
(c) if so requested by any other person, send such a copy to that person without charge to him.'.

No. 16, in page 22, line 21, leave out 'discontinue' and insert 'cut off.

No. 65, in page 22, line 29, leave out 'any' and insert 'a consumer's'.

No. 66, in page 22, line 30, leave out 'any' and insert 'a consumer's'.

No. 67, in page 22, line 44, leave out from 'off to end of line 48 and insert


', the consent of the supplier who cut off the supply, or the consent of a person who is or is about to become a relevant gas supplier'.
No. 68, in page 23, line 22, at end insert—

'Failure to notify disconnection of meter

.—(1) This paragraph applies where any meter through which gas has been supplied to any premises is completely disconnected, that is to say, is disconnected both from the service pipe and from all other pipes within the premises.

(2) Except in so far as it is not reasonably practicable for him to do so, the person making the disconnection shall—

(a) ascertain the name and address of the owner of the meter; and
(b) inform that owner of the disconnection and of the address at which the meter will be available for collection.

(3) If any person fails to comply with sub-paragraph (2) above, he shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 2 on the standard scale.'.—[Mr. Eggar.]

Mr. Eggar: I beg to move amendment No. 17, in page 25, line 2, after 'informed' insert
'by any person ("the informant")'.

Mr. Deputy Speaker: With this, it will be convenient to discuss Government amendments Nos. 18 and 19.

Mr. Eggar: It might be of assistance to the House if I mentioned that these amendments give effect to a commitment that I gave in Committee, following our debates there.
Amendment agreed to.
Amendments made: No. 18, in page 25, line 3, leave out from 'gas' to 'to' in line 8 and insert
'(other than one, in the case of a transporter, that he is required by sub-paragraph (1) above to prevent), he passes the information on, without avoidable delay, either—
(a) to a responsible person, that is to say, a person appearing to him—

(i) to be responsible (whether under that sub-paragraph or otherwise) for preventing the escape; or
(ii)".

No. 19, in page 25, line 9, at end insert 'or
(b) to a nominated person, that is to say, a person nominated by a responsible person to receive information about escapes of gas on his behalf.
(6) There shall be a sufficient compliance with sub-paragraph (5) above if the transporter, supplier or shipper is satisfied that the informant—

(a) intends to pass the information on, without avoidable delay, to a nominated person; and
(b) is in a position to do so.

(7) References in sub-paragraphs (5) and (6) above to the passing on of information to a nominated person are references to the passing on of information to that person in such manner (if any) as may be specified by the responsible person by whom that person was nominated.'
No. 20, in page 26, line 27, leave out 'from the supplier' and insert 'or'.
No. 21, in page 26, line 29, leave out from third 'gas' to end of line 33.
No. 22, in page 26, line 41, leave out 'gas fitting or meter' and insert
'meter or other gas fitting'.
No. 23, in page 26, line 46, at end insert—

'Entry for removing fittings and meters

.—(1) This paragraph applies where—


(a) a person occupying premises supplied with gas through a meter or other gas fitting owned by a public gas transporter or gas supplier ceases to take a supply through that meter or fitting; or
(b) a person entering into occupation of any premises previously supplied with gas through a meter or other gas fitting so owned does not take a supply of gas through that meter or fitting.

(2) Any officer authorised by the public gas transporter or gas supplier, after 24 hours' notice to the occupier, or to the owner of the premises if they are unoccupied, may at all reasonable times, on production of some duly authenticated document showing his authority, enter the premises for the purpose of removing the meter or other gas fitting.

(3) Sub-paragraph (3) of paragraph 19 above applies for the purposes of this paragraph as it applies for the purposes of that paragraph.'—[Mr. Eggar.]

Mr. Nigel Spearing: I beg to move amendment No. 88, in page 27, line 44, at end add—

'Duties of relevant gas shipper or supplier in relation to gas fittings

23. (1) It shall be the duty of any relevant gas shipper or supplier to make arrangements for the supply of spare parts for, or replacements of, any gas fitting or appliance of a type approved under Regulations made under this Act or under any other enactment.
(2) The Secretary of State shall—

(a) make Regulations specifying the nature and extent of the obligations imposed by subsection (1) above upon relevant gas shippers or suppliers; and
(b) monitor the carrying out of those obligations, which may be modified or added to in further Regulations.
(3) Regulations made under subsection (2) above shall be made by statutory instrument which shall be subject to annulment in pursuance of a Resolution of either House of Parliament.'.
We now move to an issue that is also of great importance to the consumers of gas, of whom notionally the Minister is in favour—that is presumably why he has introduced the Bill. I say "notionally", because there is an element of doubt, as we heard during the last debate.
Amendment No. 88, supported by my hon. Friend the Member for Newham, North-East (Mr. Timms), relates to spare parts and the replacement of approved appliances—everything inside the house which is known in the technical jargon as "upstream" of the supply, which means everything the other side of the meter which is the responsibility of the householder who pays for the gas and not of the supplier.
Newham knows all about the production and supply of gas. In Victorian times, and until fairly recently—before North sea gas—we had more than 700 acres of land dedicated to this very purpose. We had Beckton, one of the biggest gas works in the world, 90 miles of railway lines, and a workshop capable of making railway locomotives. So gas skills are indigenous to the area.
The beginnings of the gas industry, from the earliest days of the Gas Light and Coke company, whose works were in Marsham street—those round foundations are reputed to have something to do with original gasholders—were approved in this House. Gas was originally used for lighting; power and heating came later. The rules governing its use were approved in this very House. The interests of the producer were balanced against those of the consumer of a very dangerous but very useful product.
Over the years, all the private gas companies linked the safety of their product with the safety and interests of consumers. If a gas appliance goes wrong, or is faulty, the consequences are much greater than with electricity. If a fuse blows, that is inconvenient; if there is a gas leak, or something is wrong with a gas appliance, it is a very different matter.
The historic link between the obligations on the supplier and the safety of the consumer and the general public was a principle well-known to this House. I understand, however, that this Bill disaggregates the two. There is, necessarily, a well-known set of regulations relating to approved appliances. One cannot just connect any appliance from any manufacturer to any supply of gas. The calorific value has to be right; the appliance has to be adjusted correctly and approved. If not, problems will follow. That is only common sense.
Over the years, the Gas Light and Coke Company, or North Thames Gas as it became—British Gas as it now is—prized that link. Many of my constituents were involved in gas servicing and were proud of it. Now, for the first time, the pattern is to be disrupted and possibly even destroyed. Time and again with privatisation measures, the Government have given us assurances that all is well. As I shall show briefly, however, this time things have begun to go wrong even before the legislation leaves this House.
Some 200 of the 700 acres that I have mentioned were used, first by the North Thames gas board and then by British Gas, as a service centre for the whole of London, originally, and then for the whole of south-east England. Until not long ago, that service centre was being expanded. Workshops and depots were being closed as far away as Letchworth and other parts of the south-east, and the plan was to build a depot at Bromley-by-Bow, to the east of the River Lea—in West Ham, not Tower Hamlets. It was a good service site with plenty of roads, space and good workshops.
That integrated site is now to be broken up, under the legislation, into five or six units run by different firms. Wire fences are even being put up on the site. That does not seem to make sense, but the Government think it a good thing. The main point about the site is the giant store. My hon. Friend the Member for Newham, North-East and I have visited it, so we know that it houses no fewer than 20,000 spare parts. No doubt there are various types of each part; the mind boggles at how many bits and pieces are stored there in total—all in giant stacks, serviced by the latest unmanned electronically guided vehicles.
The parts are sent to service engineers and distribution depots all over south-east England in just a few hours. The parts are packed away in trailers which return to the warehouse and take them away overnight to the depots. Like many Londoners, I have personal experience of British Gas's relatively good efficiency. It had a bad time in the conversion period, but since then I have found the company extra-efficient.
Within the company finances, I suspect that the process may be something of a loss leader. As we know, however, loss leaders produce more profits and turnover: that is what they are there for. If the organisation is split up by the Bill into different businesses—to be known, I believe, as service and sales—one section will be left more

vulnerable than the other as the two cease to be integrated and each tries to make a profit for itself without any statutory responsibility for the welfare of the other.

Mr. Stephen Timms: On the basis of our visit, does my hon. Friend agree that the facility at Bromley-by-Bow is an impressive operation which has been the beneficiary of substantial investment by British Gas in the recent past? Does he further agree that there is a link between the uncertainty which now hangs over that operation, and perhaps others like it, which the amendment addresses, and the marked fall in customer confidence in British Gas as reported by the Gas Consumers Council in its 1994 annual report?

Mr. Spearing: The fact of rising complaints about the gas industry is well known. I think that I can satisfy my hon. Friend because even before the legislation has completed its passage through the House changes are being made in plans for servicing in particular. Spare parts and servicing go together. If one has an annual inspection of gas appliances—I am not declaring an interest, but all consumers do—if there is something wrong, the service engineer promises to come back the next day or the next week with a spare part. He has got to get it, so it is all part of one thing.
We were told that that giant depot, which I believe is efficient and could have coped with an area larger than south-east England, would be closed—just like that—and 200 or 300 people were to be made redundant, despite their skills and their pride in their work. Pride in service is the sort of thing that Conservative Members are keen on. Those people were not to be made compulsorily redundant: they could have had a job in Derby or Nottingham or somewhere like that. The whole gubbins, the whole bang shoot, was to be dissipated.
I wrote to British Gas to ask what it was all about. I wrote a thesis several pages long, which I will not bore the House with, analysing the Gas Bill. I received a reply from Mr. Norman Blacker, one of the directors of British Gas, who had been allocated the task by Mr. Giordano, who also sent me a short reply. Mr. Blacker said:
Your letter also asks about our Service and Retail operations. Our new Service Business Unit already operates in a highly competitive market. Our reorganisation is designed to allow us to compete effectively with the other 40,000 or so companies operating in this field. At the same time we will maintain our aim of providing high standards of service throughout the country.
Note that he says "maintain our aim", not "maintain the standards". The letter continued:
Service will be introducing home-based working for its engineers to help increase our competitiveness by removing the need for expensive depots which are only used for a short period every day. Customers will not notice any adverse effect as a result of the service they receive from our engineers, who will obtain their work information and parts directly, rather than having to make a special journey to a depot … This should save time during the working day and make for more efficient operations … Details of how this home-based working pattern will be implemented are being discussed with the relevant trade unions.
In other words, men in vans, parked outside their homes, having delivered in all sorts of curious places, would cut out the distribution depots.

Mr. Ted Rowlands: I draw my hon. Friend's attention to an illustration of exactly that. With a fanfare of trumpets, the noble Lord Walker opened a major depot as part of his valleys initiative. It has now been closed. Instead, the engineers


go to a green box at the side of a petrol filling station to pick up their bags and instructions. It may be efficient, but it is completely contradictory to the policy adopted only recently by the noble Lord Walker.

Mr. Spearing: I am not surprised to hear what my hon. Friend says. My recollection is that, other than being very successful in public relations as Secretary of State for Wales—

Mr. Rowlands: And Secretary of State for Energy.

Mr. Spearing: —and Secretary of State for Energy, when I think he was very much concerned with gas, he is some functionary in the gas world. I suppose that he must have come under the scrutiny of another noble Lord in a recent report about which we all know—an interesting link.
5.45 pm
I am grateful to my hon. Friend but, unknown to him, I was coming to same topic. In the Observer on 22 January 1995, an article headed
British Gas engineers go to church for spares
said:
British Gas service engineers are using motorway flyovers, pub car parks and church halls as collection points for spare parts, as the company struggles to introduce a new service infrastructure.

Mr. Rowlands: And petrol filling stations.

Mr. Spearing: And petrol filling stations, as my hon. Friend says. I do not think that the Government can deny that. Is that unconnected with what my hon. Friend the Member for Newham, North-East reminded us of, if we needed reminding—the downturn in service standards and upturn in complaints? Does the Minister deny that the one follows the other? That is before the appointed day and before the 40,000 competing service engineers get going.
I wonder what sort of cut-throat competition there will now be in the industry. Is competition really required? We may disagree with double gas pipes in the ground—that may seem stupid enough—or gas from different suppliers going into one house on a take-it-or-leave-it basis, but is it necessary to have people other than suppliers competing? The Minister must either deny that that is going on or accept it and, I hope, support the amendment.
The depot at Bromley-by-Bow, with the skills and loyalty of its staff who are working all the time, is a symbol of service to the public throughout the nation. The knock-on effect of its closure and its replacement by the church hall, motorway flyover and filling station, about which we have just heard from my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), is a symbol of the downturn in the standards of maintenance.
What about the skills in the gas service industry? Many years ago in my other job, I helped to place school pupils—experience outside the House, as Lord Nolan calls it, and very useful—and I found that British Gas apprenticeships were not only the most sought after but were often the start of lifelong careers. Many people from my part of the world and that of my hon. Friend the Member for Newham, North-East served the gas industry for most of their lives and were pleased to do so under the relatively benign regime of the Gas Light and Coke Company and the even better regime of British Gas and the publicly owned sector of it. Their skills and those of

the private contractors under some sort of licence which some think is not good enough, were built up on the apprenticeships of the gas industry. What will happen to those skills?
This is part of so-called privatisation. This commodity, which is of great value to us, is not produced privately. It is publicly owned gas in the middle of the North sea, or thereabouts, piped to us. The gas in the North sea cannot be owned other than by the British people. I see that the Minister nods. Under this legislation, it is being privately distributed by a curious system of competition under the regulator. The obligations on the supplier should be to maintain those services that we have had from private and public gas suppliers alike. I believe that that is incorporated in the amendment.
Even if we do not get very far tonight, I am looking to the Minister to deny any of the facts that I have presented and to say why the obligation in the amendment, perhaps in another form, should not be incorporated in this important Bill, which for the first time disaggregates the obligation of the supplier to supply, maintain and provide—at a reasonable cost, of course—for the safety of the equipment upstream of the meter.

Mr. Eggar: I do not want to be unnecessarily unkind to the hon. Member for Newham, South (Mr. Spearing), but at least some of his obiter dicta suggest that he has not read the Bill in its entirety and does not understand the full implications of what is proposed. In fairness to him, however, I concede that he was concentrating on a constituency point.
The hon. Gentleman failed to appreciate that the 40,000 competitors to whom he and, I believe, Mr. Blacker referred have been around for a long time. For years, they—the so-called Corgi-approved operators—have competed with British Gas, including the element of British Gas that looks after appliances "upstream of the meter", as the hon. Gentleman put it. There has never been any obligation on those operators to stock limitless spare parts; like garages, they have developed a system that has allowed them access to warehouses. I believe that they have sometimes had direct access to British Gas warehouses.
The amendment proposes that new suppliers should be obliged to keep a stock of spares for which, in fact, they would have no use. Many of those suppliers supply only gas, and have no desire to supply appliances. They recognise not only that British Gas will continue—presumably—to provide an effective spares service, but that those 40,000 competitors will do the same. The hon. Gentleman's proposal constitutes an imposition on potential suppliers: it is rather like requiring water companies to supply washers to repair leaking taps, which no one has ever suggested.
I entirely understand the hon. Gentleman's concern about employment in his constituency, and appreciate that, as a constituency Member, he must support the interests of his constituents. I must say, however, that the logic of his amendment is fundamentally flawed. The competitive marketplace has provided many sources of servicing and spares, and I have no doubt that it will continue to do so without the need for legislative intervention.

Mr. Nigel Griffiths: My hon. Friend the Member for Newham, South (Mr. Spearing) has done the House a service in highlighting the problems that now face gas


consumers. They are of recent making. British Gas is fearful of the opening of a competitive market, and the impact on the public is clear to my hon. Friend and to me—and, I think, to 8 million gas consumers. It is a good prelude to what will happen when the Bill is enacted.
Before 1 January, British Gas service engineers held a range of spares in their vans. Those spares were held in depots throughout the country, in case engineers were called out in an emergency to cut off cookers or heaters because they contained defective parts. That was part of the service for which customers paid, and it enabled engineers to reconnect many appliances because their vans contained standard stock from the depots.
In Committee, the Minister argued forcefully for an end to that practice. He failed to take on board not just the fact that members of the public might be left without a working cooker or heater—which, of course, is a tremendous imposition on the elderly and disabled—but the fact that an irresponsible or, indeed, criminally negligent person might reconnect the appliance without having it fixed. That would mean a cost to the community: not merely the person concerned, but his or her family and neighbours, might be blown up. In his creditable amendment, my hon. Friend the Member for Newham, South seeks to ensure that gas suppliers supply more than just gas itself.
A very old hand—a former director of British Gas, now retired—told me, "The problem with the gas market now is that you do not have to know anything about it; you just have to have a phone, a desk and a sympathetic bank manager. You order the gas on the phone, at beach-head prices, and agree to supply it somewhere—and British Gas TransCo has to put it down its pipes. You have no social obligations; you have no obligations to hold spares that the public might want."
My hon. Friend the Member for Newham, South focused perceptively on my main fear, eliciting a hopelessly inadequate response from the Minister. I fear that the new gas competitors will merely supply gas, and that people who have problems with their gas appliances—regardless of whether they have been supplied by British Gas—will be left to lump it, no matter how old, poor or crippled they may be. I fear that the new competitors, as private contractors, will be able to walk away from the problem.
My hon. Friend rightly sought to pin the Minister down, and he did so with a degree of cleverness which belied the Minister's own clever view of himself. He pinned the Minister down to saying, "Why should people who are simply supplying gas—for that is what competition is about—supply any additional services? Why should they keep spare parts at all?"
Having discussed the amendment with my hon. Friend, I can say that he knows that this excellent measure is likely to receive a sympathetic hearing from people more thoughtful than the Government.

Mr. Spearing: With the leave of the House, Mr. Deputy Speaker—

Mr. Deputy Speaker: Order. The hon. Gentleman usually knows the rules of the House in great detail, but I must point out to him that on this occasion he does not need the leave of the House to speak.

Mr. Spearing: I am grateful to you, Mr. Deputy Speaker, but I believe in good insurance policies.
I shall, I hope, find it not too difficult to demolish the logic of the Minister, who claims that I am illogical. He began by saying that I had not read the Bill—I confess that I have not read all of it—and that something in the Bill rendered the amendment redundant. Having implied that the evidence was there, however, he did not produce it. He also said, "Of course I forgive the hon. Gentleman, and pat him on the head: he was making a constituency point, which he had to make. We all know about that, ho ho."
In fact, my point applies to 8 million consumers. It is illustrated by what is happening in a depot in West Ham, which is three times the size of a football pitch and which, according to the accountants, will be too costly to maintain. "Oh," says the Minister, "There will be 40,000 contractors, all ready and waiting. Indeed, they are there now." He means the CORGI contractors.
I shall not go into the details, because we must make progress, but there is considerable worry about the standards to which those so-called CORGI contractors operate. That may have been dealt with in other parts of the Bill. Those contractors have been riding on the backs of the gas suppliers, especially in my part of the world, which is covered by North Thames Gas.
The Minister says, "Well, the contractors will be able to provide spares from somewhere else." Owing to various factors and the involvement of other people, however, the cost of the operation will escalate. Showrooms have been mentioned. I recall that someone in another place about which we are not supposed to know wrote a wonderful article about how he tried to obtain a new electric stove.
It was possible to go to a one-stop shop for electrical appliances, which provided advice and a variety of products, but will that be possible in future? Will it be possible to pay bills, obtain advice, examine appliances and secure spare parts? I very much doubt it. There will not be such a service. The Minister said that there would be an imposition on new suppliers, and therein lies the rub. He is defending the new suppliers but is there not an obligation on all public gas suppliers, whether old or new, to make the supply safe for the consumer?
6 pm
The Minister used water supply as an analogy. Perhaps he does not know that many years ago I had a slight connection with the water industry—not, I hasten to add, in terms of income but as a decorative vice-president of the British Waterworks Association. There is all the difference in the world between a leaking tap and a gas leak. A water leak is visible and the supply can be turned off at the main or other action taken. Perhaps the Minister does not know that water companies readily supplied free washers. A consumer could telephone the supplier, who fitted the washer free. It was covered by the water rates, in the old days when we paid water rates and not water charges. The Minister's analogy with the water industry and water taps is therefore wrong.
It is clear that people want gas and are willing to pay for it, but they want it supplied in a safe manner and they want to be assured that equipment and spare parts are available. The Bill will not maintain the standards to which people in this country have been accustomed from the gas industry for perhaps more than a century. I hope that at some later stage in the progress of the Bill that will be understood and rectified. As I know where the Bill goes next, and as the Government may have second thoughts, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.

Schedule 3

OTHER AMENDMENTS OF PART I OF 1986 ACT

Amendments made: No. 69, in page 28, leave out lines 31 to 35 and insert—
'(4) Subject to subsection (5) below, a consent under subsection (2) above may be given subject to compliance with—

(a) such modification or other conditions as the Director considers necessary or expedient for the purpose of protecting the interests of consumers; and
(b) such incidental or consequential modification conditions as he considers necessary or expedient.'.

No. 70, in page 29, line 25, after '4', insert ', 7A'.
No. 71, in page 35, line 13, leave out
'with gas by a gas supplier'
and insert
'by a gas supplier with gas conveyed to particular premises'.
No. 24, in page 30, line 45, leave out 'after consultation with' and insert 'with the consent of'.
No. 25, in page 31, line 30, at end insert—
'( ) the making or maintenance of the connection would involve a new or increased supply of gas to the premises in question;'.
No. 26, in page 31, line 35, leave out 'that rate' and insert
'the new or increased supply'.
No. 27, in page 33, line 35, at end insert—
'( ) The Director may by notice in writing require a public gas transporter to give to the Director, or to any person appointed by him for the purpose, within such time and at such place as may be specified in the notice, such information as the Director may reasonably require for the purpose of making regulations under this section or of giving directions under such regulations.'
No. 28, in page 34, line 18, leave out second 'of' and insert 'owned or occupied by'.
No. 4, in page 36, line 53, leave out 'and (4)' insert 'to (4A)'.
No. 5, in page 37, line 14, leave out 'the stamping of' and insert 'another person to stamp'.
No. 6, in page 37, line 18, leave out
'or authorised to stamp it'.
No. 7, in page 37, line 21, leave out from 'submission' to 'and' in line 22.
No. 8, in page 37, line 24, at end insert—
'(4A) A meter examiner may authorise another person to stamp a meter, notwithstanding that he has not himself examined it, if—

(a) the meter was manufactured or repaired by that person;
(b) that person has obtained the consent of the Director to his stamping of the meter; and
(c) any conditions subject to which the consent was given have been satisfied.'.

No. 29, in page 43, line 9, leave out from beginning to 'with' in line 10 and insert 'he has consulted'.
No. 9, in page 43, line 48, leave out from beginning to 'shall' in line 2 on page 44 and insert
'licences under section 7 above, licences under subsection (1) of section 7A above or licences under subsection (2) of that section, he—
(a)'.
No. 10, in page 44, line 5, at end insert 'and
(b) may make such incidental or consequential modifications as he considers necessary or expedient of any conditions of licences under that provision granted before that time.'.
No. 72, in page 46, line 34, leave out 'this section' and insert 'subsection (1A) above'.
No. 11, in page 46, line 48, leave out from 'holder" to 'a' in line 49 and insert—

'(a) in relation to a reference under subsection (1A) above, means the holder of a licence to which the reference relates;
(b) in relation to the modification of'.

No. 12, in page 46, line 50, leave out
'a licence holder whose licence'
and insert
'the holder of a licence which'.
No. 30, in page 48, leave out lines 6 to 8 and insert—
'(b) for paragraph (b) there shall be substituted the following paragraph—
(b) the circumstances are as mentioned in section 73(1) of that Act (order on report on merger reference) and at least one of the two or more enterprises which ceased, or (in the application of that provision as it has effect by virtue of section 75(4)(e) of that Act) which would cease, to be distinct enterprises was or, as the case may be, is engaged in the carrying on of activities authorised by a licence;".'
No. 73, in page 53, leave out lines 1 to 3 and insert—

' "(a) such activities as are mentioned in section 5(1) above; and
(b) activities ancillary to such activities.".'.

No. 74, in page 54, line 11, leave out from 'activities' to 'and' in line 12 and insert
'to which this subsection applies'.
No. 75, in page 54, leave out lines 22 to 24 and insert
'the carrying on of activities to which this subsection applies'.
No. 76, in page 54, line 26, at end insert—
'( ) Subsections (2) and (3) above apply to—

(a) activities required or authorised by licences;
(b) such activities as are mentioned in section 5(1) above, whether or not so authorised; and
(c) the storage of gas.'.

No. 31, in page 56, line 11, leave out 'road' and insert 'motor'.—[Mr. Eggar.]

Schedule 4

MINOR AND CONSEQUENTIAL AMENDMENTS

Amendments made: No. 32, in page 64, line 23, after 'and' insert 'section 22A(1)(b) of and'.
No. 77, in page 66, line 42, at end insert—

'Central Rating Lists Regulations 1994 (S. I. 1994/3121)

. In Part 3 of the Schedule to the Central Rating Lists Regulations 1994, for the words "public gas supplier", in both places where they occur, there shall be substituted the words "public gas transporter".'.—[Mr. Eggar.]

Schedule 5

TRANSITIONAL PROVISIONS AND SAVINGS

Sir John Hannam: I beg to move amendment No. 40, in page 68, line 19, leave out from 'register' to end of line 22 and insert—
'and
(b) subject to that and to the provisions of any contract entered into before the passing of this Act shall be binding on all persons.'.

Madam Deputy Speaker (Dame Janet Fookes): With this, it will be convenient to discuss amendment No. 41, in page 68, line 27, at end insert—
'(7) No provision such as is mentioned in sub-paragraph (4) above shall apply to any contract entered into before the passing of this Act.'.

Sir John Hannam: The amendments deal with the assignment of rights and liabilities. Like so many of my hon. Friends, I welcomed the Bill when it was introduced in March. Consumers in the industrial and commercial gas supply market have already benefited by substantial savings of up to 20 per cent. as a result of competitive marketing. In April 1996, when the domestic gas pilot project comes into operation in the south-west, my constituents in and around Exeter will be some of the first domestic users to benefit from the liberalisation of this market.
The anticipated price differential from which my constituents will benefit can be compared with the reductions that occurred in the telecom market when increased competitiveness forced British Telecom to become more efficient, allowing it to narrow its margins in line with the rest of the market. That has been the experience in the supply of gas to the industrial market, almost to the point at which the independent suppliers are now finding it hard to realise a respectable return on their investment in such a competitive marketplace.
When the industrial market was opened up, the composition of the initial supplier or producers of gas from the North sea remained unchanged, as did the size of the marketplace, creating the demand for a supply of gas in factories, smelting works and brick works throughout the United Kingdom's industrial base. Similarly, exploration and production companies will continue to produce gas from the fields that they have been operating for as long as 15 years, and the domestic market will remain constant, or its size and the demand for gas may increase.
For those reasons, I am concerned at the precedent that is being set in paragraph 2 of schedule 5 to the Bill, which effectively invites the renegotiation of gas supply contracts at the well or production end just because the gas supplier at the street or consumer end will possibly change at some time between 1996 and 1998 or beyond.
Historically, most gas sale contracts have been long-term arrangements, typically for the projected life of a field, and they were concluded between the field owners and British Gas. For example, the Hewett field principal agreement was concluded in 1968 and still survives.
Gasfield owners require some certainty that the buyer will buy a certain amount of gas in each contract year, and British Gas required some certainty that the seller

would deliver those same amounts each year. Gas sale contracts have been concluded in that way for a number of reasons, principally that, first, gas is not a commodity which can be easily moved around the world like oil. Therefore, a seller's choice of buyer is restricted and for many years the only customer has been British Gas.
Secondly, the cost of offshore operations is such that, as soon as the field is brought on stream, it cannot be economically suspended. The decision to invest hundreds of millions of pounds in a particular asset has been taken on the basis of a secure long-term contract to sell the gas that is produced. I should mention that the capital investment going into that hundreds of millions of pounds development has been raised to commission exploration and development projects, and has been offered by banks on the understanding that repayment would be achieved from a steady revenue stream arising from one long-term contract and one long-term customer: British Gas, which, one would assume, has an exceptional credit and status rating in corporate lending circles.
Paragraph 2 of schedule 5 as currently drafted would permit British Gas to assign gas contracts, without counter-party assent, to an affiliate that may not have the financial means and structure necessary, or even the inclination to meet commitments that British Gas made on freely entering into those contracts, such as take or pay contracts. As written, that could and would include existing gas supply contracts. As the hon. Member for Clackmannan (Mr. O'Neill) said:
If the going got really rough, British Gas could allow those smaller operations to founder as companies and its obligations would then disappear. The gas suppliers would be left to pick up the tab."—[Official Report, Standing Committee A, 27 April 1995; c. 327.]
If the provision were enacted in its current form, it would have profoundly damaging consequences, both in relation to the future development of Britain's offshore oil and gas resources—and hence longer-term gas supply security—and internationally to the sanctity of contracts, a principle that is fundamental to the interests of a country whose offshore sector enjoys such extensive international investment.
By applying the schedule in a retrospective manner, there is a strong chance that the sanctity of contracts, an essential prerequisite of long-run international business, will be threatened. Let us not forget that those contracts were freely entered into by two responsible and consenting parties.
I know that this matter has been discussed to some extent in Committee, when my hon. Friend the Minister likened the guarantees for gas contracts to other items "of varying magnitude" which British Gas purchases. He mentioned everything from computers, to telephones to office cleaners. With all due respect, it is not quite appropriate to compare gas contracts worth millions of pounds with cleaning contracts.
As we know, liberalisation is happening in a phased manner, commencing with a trial area of approximately 2 million homes in the west country around April next year. I can find no valid reason why the assigning of rights and liabilities should not apply to gas contracts negotiated and agreed after the Bill has received Royal Assent.
My proposed amendments avoid the provisions of schedule 5 applying to contracts in existence before Royal Assent. Amendment No. 41 makes the transfer binding on everyone, subject to the consent of anyone whose consent would otherwise be necessary under the terms of the contract. That serves to clarify the position that the amendments, grouped together, attempt to preserve only existing contractual positions.
Any gas supply contracts negotiated after Royal Assent would be subject to liabilities being reassigned, but then at least both parties negotiating would be aware of that extra dimension during negotiation.
In that way, sanctity of contract would be maintained and the future development of Britain's offshore oil and gas resources, and hence longer-term gas supply security, would no longer be threatened. The United Kingdom continental shelf would continue to receive the extensive international investment that it enjoys.
I know that my hon. Friend has had meetings with the United Kingdom Offshore Association in recent days and over the past week and that he is fully aware of the concerns of the gas supply industry. I hope that he will respond to those fears today.

Mr. O'Neill: The amendment is broadly the same as the amendment that we debated in Committee, and it is being considered at roughly the same stage in proceedings as that amendment. It is unfortunate that such an important matter should be considered at what is, to all intents and purposes, the fag end of proceedings. It is important, however, that we debate it again, because, in Committee, the Minister did not fully appreciate the concerns that were expressed by the other parties, as it were, in the liberalisation process: the suppliers of gas in the first instance.
Discussions have taken place. It would be useful if the Minister reported on them this evening. I am not sure whether they will necessarily be accepted by everyone in the industry. Like the hon. Member for Exeter (Sir J. Hannam), a number of people from a variety of companies have come to see me. Although there is always a degree of special pleading in these matters, tonight I shall focus only on one important point: the sanctity of contract.
6.15 pm
I can well imagine that, perhaps in about 18 months' time, if a Labour Government were to introduce utilities regulations or changes in arrangements that were seen to favour a major employer who had a fully unionised work force and to whom it was considered the Labour party might be sympathetic, and if some attempt were made to nudge a piece of legislation slightly in that employer's direction, that tilting would be regarded with great suspicion and as something akin to the end of western civilisation. People would say that the Labour party was seeking to distort the law of contract, on which the whole of our business system seems to rest. As a consequence, we would be the subject of opprobrium from the press and everyone else.
The Government may be lucky that they have not attracted such attention, and that the United Kingdom Offshore Operators Association and bodies such as Brindex have been adopting a softly, softly approach, but contracts that were entered into before the original privatisation, which have been running, as has been said,

for the best part of 25 years in one or two instances, still have some time to go, and a number of considerations must be taken into account.
We would like to think that the good name of Britain would not be the subject of international disdain. The United Kingdom continental shelf has still some time to operate as an active oil and gas field. We want to ensure that companies will come to the North sea and to the west of Shetland in the certain knowledge that, when a deal is struck, it is struck in all good faith, and that abrogations will not take place.
We recognise that circumstances have changed and that British Gas does not require gas in the quantities to which it once subscribed. When it entered into some of those contracts, it did not have the Morecambe field at its disposal. It does not need all the gas that it is contracted to purchase, but it might be able to purchase more if it were not taking so much of its gas from the Morecambe field. That is an internal matter that must be the subject of negotiation.
It will be helpful if the Minister tells us what the state of the negotiations are. As was pointed out by the hon. Member for Exeter, in the initial consideration of this matter, the Minister's response was not fully considered or wholly adequate as he drew analogies with other pieces of privatisation legislation that, frankly, were not directly relevant. He also, in relation to British Gas's operation, drew internal analogies that were not appropriate because, as has been pointed out, agreements for office supplies and the like are different from agreements that are entered into on a large financial scale and that relate to important contracts of an international character. I hope that the Minister will be able to give some hope that there will be stability and that negotiations will be entered into, with all sides being able to reach a satisfactory compromise.
It has been argued that the amendment would perhaps tilt the balance too much the other way. In many respects, and quite deservedly so on occasions, the Minister is damned if he does and damned if he doesn't. On this occasion, he has shown favour to a British company for reasons that were not fully appreciated, and that favour could rebound on other British companies at other times. As I said, if a Labour Government had introduced the provision, we would have had the coals of hell heaped on our heads, and probably correctly so, because it would have suggested a degree of favour for one company against another and would undermine the sanctity of contract law.
It is incumbent upon the Minister to tell us now, in terms that he was not able to use in Committee, where he stands. We also need to know, through their trade associations, how satisfied the oil and gas companies have been with some of the undertakings that he has suggested might be the way out of this difficult problem.

Mr. Robert Banks: I congratulate my hon. Friend the Member for Exeter (Sir J. Hannam) on tabling the amendment and on the way in which he presented his case. He has drawn support from the Opposition Front Bench, which usually strikes a chord of alarm, but the hon. Member for Clackmannan (Mr. O'Neill) stressed the sanctity of contracts, and that rings true with me because it is why I support the amendment.
As far as possible, I have always resisted retrospective legislation. I believe that contracts undertaken, particularly in this instance, should always be honoured


as best as is possible. I support and fully respect the merits of the Bill. It is a great Bill. It frees up competition and will do a remarkable job in reducing prices for the consumer. It makes British Gas a wholly different animal with the separation of gas supplies from the monopoly over the gas pipeline network.
Although there is full justification for the new arrangement, those companies with long-term investments based on supply contracts with British Gas are disadvantaged because British Gas is not held to the original contracts, as has been expressed, and because gas companies are having to renegotiate from a position of weakness. In the past, British Gas has benefited from the continuity of its supplies at prices which were set under the contractual agreements. As has been said, in some cases those agreements go back over 20 years or more. At the same time, gas companies have had the opportunity to plan and raise finance on a long-term investment programme on the basis of the contracts that have been given.

Mr. Michael Clapham: Is it not a fact that all those contracts are indexed to either the retail prices index or the price of oil?

Mr. Banks: I do not know the answer to that because I do not have that information. I imagine that some of the contracts would be indexed and some would not. That is a matter that we could check at a later date.
We must bear in mind not just the on-going revenue that arises from the contracts and the assuredness of the programme of investment that the companies have made and must continue to make, but the dismantling of the gas rigs when they have exhausted their fields. There is a big question mark about how the rigs are to be disposed of. Considerable costs will be involved, and the contracts will become all the more valuable because that must be borne in mind.
The fact that these companies will have to renegotiate the pricing levels of gas while British Gas will have a free hand to place the contracts with one or more of its affiliate companies causes some concern because, as I understand it, those companies do not have the right to voice their opinions as to the viability, competitiveness, competence and financial stability of the affiliate companies. All in all, a great deal of work has to be done to arrive at a position that is fair to the companies that supply British Gas and which will ensure that they get a fair deal in the future. Those companies will naturally want assurances about the companies that will take over the contracts that they had, hitherto, with British Gas. That should be fully understood by British Gas and I should like to see it woven into the legislation in some way.
The length of the contractual obligations and the price structures in the original contracts should be taken into account in the negotiations of new terms which will be necessary as a result of this legislation. We must look carefully at the situation because some companies with substantial infrastructure investments will suffer considerable losses. I accept that we are facing changed circumstances, but there are obligations that must be fulfilled if we are to see the contracts honoured.
Gas companies achieving a high price structure—higher than the market at present—as a result of some of the old contracts could be placed in a more favourable

position for the price cutting of the surplus gas that they have available to put on the market. That causes a problem—I recognise that the Minister accepts that—because it would be unrealistic for a company to benefit in that way; to cut out competition and achieve a greater share of the gas market as a result of an overgenerous new price structure.
I hope that the message that will be recorded in Hansard will be taken account of, and that their Lordships in another place will take note of our debate on this subject.
I believe that, where decisions have been made on the basis of contracts that have been entered into, those contracts must be recognised and there is an obligation to ensure that those companies do not suffer unnecessarily from the new terms and conditions that will now apply and which will have to be renegotiated.

Mr. Bill Michie: On a point of order, Madam Deputy Speaker. I wish to inform the House that some members of the Select Committee on Members' Interests have walked out after two votes—

Madam Deputy Speaker: Order. That is not a matter for the Chair. If the hon. Gentleman wishes to raise this matter, he must do so in another way. It is not a point of order.

Mr. Michie: On a point of order, Madam Speaker.

Madam Deputy Speaker: Is it a different point of order?

Mr. Michie: It is the same point of order—

Madam Deputy Speaker: Order. I have already ruled on that. That is enough.

Mr. Eggar: I am grateful to my hon. Friends the Members for Exeter (Sir J. Hannam) and for Harrogate (Mr. Banks) for raising this important subject. I am grateful also for the contribution from the hon. Member for Clackmannan (Mr. O'Neill). Over the past week or so, I have been involved in detailed discussions with individual producer companies as well as with British Gas, UKOOA and Brindex—the trade associations of the independent producers and the offshore operators. They are aware of the general thrust of what I am about to say.
Suggestions have been made that the provisions of schedule 5 would encourage the abrogation of commercial contracts and give an unfair commercial advantage to British Gas. That was the thrust of the remarks of the hon. Member for Clackmannan and was behind the concerns expressed by my hon. Friends. I do not accept that view, but it would be helpful if I described how the Government see the position.
I have said consistently that the successful establishment of a competitive gas supply market will require some adjustment to the contractual arrangements under which gas is produced and delivered to suppliers. British Gas will no longer hold a monopoly and will, inevitably, lose market share to the new suppliers. Some adjustment to the previous contractual arrangements appropriate to a monopoly supplier will be necessary. However, there is no reason why that process should result in disruption of the market if it is carried out in an orderly manner between the commercial interests involved. I want to see British Gas and the producers developing the new contractual framework on an even-handed basis.
I recognise that many companies have made significant investments to support their gas contracts—that was the point made by my hon. Friends—and that they have a legitimate interest in maintaining an acceptable overall position. That in turn should assure the continuation of offshore investment in future gas production, which is extremely important to the United Kingdom.
Schedule 5 closely follows similar provisions in several other statutes so there is ample precedent for the wording of schedule 5. A key feature of the arrangements proposed in the Bill is the separation of the functions of gas transportation and supply. That is to ensure that competing suppliers, including the supply arms of British Gas, use the pipeline network on the same basis.
6.30 pm
It follows, therefore, that provision must be made for a scheme under which British Gas will allocate its various rights and obligations among the different legal entities that it will need to create in order to carry on its business. That is integral to the Bill. I can, however, assure the House that it is not the Government's intention that the provisions should give any commercial interest an unfair advantage over any other. Schedule 5 emphatically does not create a right for British Gas simply to walk away from contracts.
The Government's objective is to ensure a framework for a competitive gas industry in which all can participate on an equitable basis. The Government will be watching the developing commercial discussions very carefully to ensure that this overriding objective is met.
I hope that what I have said has allayed the fears of my hon. Friends and answered some of the points raised by the hon. Member for Clackmannan. It is an important and sensitive matter. Large sums of money are at stake and the future of the gas industry—onshore and offshore—is greatly affected by the terms of the contracts. We do not take the matter lightly, and I know that the producers and British Gas—do not do so. I am confident that, in the light of what I have said, the producers, British Gas and other entities will be able to reach a satisfactory commercial conclusion to the benefit of all involved.

Sir John Hannam: I thank my right hon. Friend for his comments which will assist in reassuring the gas supply industry. Certainly, the issue needed to be debated today and will no doubt be debated again in another place. However, in the light of my right hon. Friend's helpful remarks, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendments made: No. 13, in page 69, line 19, at end insert—
'( ) As soon as practicable after making a scheme under this paragraph, the Secretary of State shall publish the text of each licence which by virtue of the scheme is treated as granted under section 7 or 7A(1) or (2) of the 1986 Act; and any text so published shall be treated as authoritative unless the contrary is shown.'.
No. 78, in page 70, line 19, at end insert—

'Transfers under paragraph 6: corporation tax

.—(1) Any shares issued to the public gas supplier by a transferee in pursuance of the scheme under paragraph 2 above shall be treated for the purposes of the Corporation Tax Acts as if they had been issued wholly in consideration of a subscription paid to the transferee (and attributable equally between those shares) of an amount equal to the difference between—


(a) the value, on the appointed day, of the property, rights and liabilities vested in the transferee by paragraph 6 above; and
(b) the principal sum payable under any debentures issued to the supplier by the transferee in pursuance of the scheme.

(2) The value required to be determined for the purposes of sub-paragraph (1)(a) above is market value, as defined in section 272 of the Taxation of Chargeable Gains Act 1992.

(3) Any debenture issued to the public gas supplier by a transferee in pursuance of the scheme under paragraph 2 above shall be treated for the purposes of the Corporation Tax Acts as if it had been issued—

(a) wholly in consideration of a loan made to the transferee of an amount equal to the principal sum payable under the debenture; and
(b) wholly and exclusively for the purposes of the trade or business carried on by the transferee.

(4) For the purposes of Chapter II of Part VI of the Income and Corporation Taxes Act 1988 (definition of distributions), where in the case of any transfer under paragraph 6 above any consideration given or treated as given in respect of a security relating to—

(a) any liability; or
(b) the use of the principal to which any liability, being a liability to interest or an equivalent liability, relates,

would fall (apart from this sub-paragraph) to be regarded for those purposes as new consideration received by the public gas supplier, that consideration shall be treated instead, to the extent that it relates to so much of the liability as falls in consequence of the transfer to be discharged by the transferee, as if it were new consideration received by the transferee.'.

No. 79, in page 70, line 19, at end insert—

'Transfers under paragraph 6: petroleum revenue tax and gas levy

Where any transfer is effected by paragraph 6 above, the transferee shall be treated—

(a) for the purposes of section 10(1)(a) of the Oil Taxation Act 1975; and
(b) for the purposes of the Gas Levy Act 1981,

as if it were the same person as the public gas supplier.'.

No. 80, in page 70, line 19, at end insert—

'Transfers under paragraph 6: consequential modifications of rating provisions

.—(1) This paragraph applies where any transfer effected by paragraph 6 above is a transfer of a hereditament which, immediately before the appointed day, falls within the description set out in Part 3 of the Schedule to the Central Rating Lists Regulations 1994.
(2) The Secretary of State may by order make such modifications of that Part of that Schedule, and of the British Gas plc (Rateable Values) Order 1994, as may appear to him necessary or expedient as a consequence of the transfer.
(3) An order under this paragraph which is made after the appointed day may have effect as from that day or any later day.
(4) Where, by virtue of sub-paragraph (3) above, an order under this paragraph has effect from a day earlier than that on which it is made, any necessary alteration shall be made with effect from that earlier day to any central rating list in which the hereditament is shown.
(5) An order under this paragraph shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.'.

No. 33, in page 70, line 42, leave out '("the gas' and insert '(a "gas".
No. 34, in page 71, line 4, leave out third 'the' and insert 'each'.
No. 35, in page 71, line 22, at end insert 'concerned'.
No. 36, in page 71, line 22, at end insert—


'( ) A scheme under this paragraph may make different provisions for different cases or classes of cases determined by, or in accordance with, the provisions of the scheme.
( ) As soon as practicable after making a scheme under this paragraph, the Secretary of State shall publish, as respects each different case or class of case—

(a) the text of any exemption which by virtue of the scheme is treated as granted under section 6A of the 1986 Act; and
(b) the text of any licence which by virtue of the scheme is treated as granted under section 7A(1) or (2) of that Act;

and any text so published shall be treated as authoritative unless the contrary is shown.'
No. 37, in page 71, line 23, leave out second 'the' and insert 'each'.
No. 38, in page 71, line 28, leave out 'the gas supplier' and insert
'such gas suppliers as he considers appropriate'.
No. 39, in page 71, line 29, leave out second 'the' and insert 'each'.
No. 14, in page 71, line 47, leave out
'have effect on and after that day'
and insert
'be treated for the purposes of section 5(1)(c) of the 1986 Act'.
No. 81, in page 71, line 48, after 'supplier's', insert 'transport'.
No. 82, in page 72, line 1, leave out 'paragraph' and insert
'Part of this Schedule "transport'.

No. 83, in page 73, line 42, at end insert—

'Recovery of gas charges etc.

.—(1) Where—

(a) such a demand as is mentioned in paragraph 7(5) of Schedule 5 to the 1986 Act (recovery of gas charges etc.) has been made by a public gas supplier; and
(b) the payment demanded is not made before the appointed day,

paragraph 7(1) of Schedule 2B to the 1986 Act shall have effect as if the demand had been made by the supplier's domestic supply successor on the day on which it was made by the supplier.
(2) Where—

(a) such a notice of intention as is mentioned in paragraph 7(5) of Schedule 5 to the 1986 Act has been given by a public gas supplier; and
(b) the supply of gas is not cut off before the appointed day,

paragraph 7(3) of Schedule 2B to the 1986 Act shall have effect as if the notice had been given by the supplier's domestic supply successor on the day on which it was given by the supplier.
(3) In this Part of this Schedule "domestic supply successor", in relation to a public gas supplier, means the person who becomes the holder of a licence under subsection (1) of section 7A of the 1986 Act by virtue of the scheme made by or in relation to that supplier under Part I of this Schedule.'.

No. 84, in page 73, line 42, at end insert—

'Use of antifluctuators and valves

. Any notice—

(a) which has been given by a public gas supplier under sub-paragraph (1) or (2) of paragraph 8 (use of antifluctuators and valves) of Schedule 5 to the 1986 Act; and
(b) which is in force immediately before the appointed day, shall have effect on and after that day as if it had been given on that day under sub-paragraph (1) or, as the case may be, sub-paragraph (2) of paragraph 13 of Schedule 2B to that Act by the supplier's transport successor.'.

No. 85, in page 73, line 42, at end insert—

'Restoration of supply without consent

.—(1) Where—

(a) a supply of gas to any premises has been cut off by a public gas supplier under paragraph 8 (use of antifluctuators and valves) or paragraph 9 (improper use of gas) of Schedule 5 to the 1986 Act; and
(b) the supply is not restored before the appointed day,

paragraph 9 of Schedule 2B to that Act shall have effect as if those premises had been disconnected on that day by the supplier's transport successor otherwise than in the exercise of such a power as is mentioned in sub-paragraph (1) of that paragraph.

(2) Where—

(a) a supply of gas to any premises has been cut off by a public gas supplier otherwise than under paragraph 8 or 9 of Schedule 5 to the 1986 Act and otherwise than in the exercise of a power conferred by regulations under section 18(2) of that Act; and
(b) the supply is not restored before the appointed day,

paragraph 9 of Schedule 2B to that Act shall have effect as if a supply of gas to those premises had been cut off on that day by the supplier's domestic supply successor otherwise than in the exercise of such a power as is mentioned in sub-paragraph (1) of that paragraph.'.

No. 86, in page 73, line 42, at end insert—

'Failure to notify connection or disconnection of service pipe

. Any notice—

(a) which has been given to a public gas supplier under sub-paragraph (1) of paragraph 12 (failure to notify connection or disconnection of service pipe) of Schedule 5 to the 1986 Act; and
(b) which is in force immediately before the appointed day,

shall have effect on and after that day as if it had been given on that day under sub-paragraph (1) of paragraph 10 of Schedule 2B to that Act to the supplier's transport successor.'.

No. 87, in page 73, line 42, at end insert—

'Rating provisions

. Nothing in this Act shall affect the operation of the following, namely—

(a) sections 19 and 33 of and Schedules 3 and 6 to the General Rate Act 1967 and Schedule 3 to the Local Government Act 1974, so far as those provisions of those Acts continue to have effect in relation to periods ending before 1st April 1990;
(b) the Central Rating Lists Regulations 1989, so far as those Regulations continue to have effect in relation to periods ending before 1st April 1995; and
(c) the Central Rating Lists Regulations 1994, so far as those Regulations have effect in relation to periods ending before the appointed day.'.—[Mr. Eggar.]

Order for Third Reading read.

Motion made, and Question proposed, That the Bill be now read the Third time.— [Mr. Eggar.]

Mr. O'Neill: On Second Reading, we tabled a reasoned amendment because, although we did not oppose the principle of the Bill, we had misgivings about the way in which it dealt with a number of issues. We expressed a number of qualifications, to which we returned in Committee. We sought additional protection for consumers, especially those on low incomes and income support, and wanted explicit guarantees that the possibility of cherry-picking and social dumping would not be allowed, but we did not get them.
We also asked about postalised pricing. The Minister said last night that he hoped that he could achieve such pricing but thought that it might not last. We were


extremely concerned about all aspects of safety and matters relating to the health and safety of those working in the gas industry. In addition, we drew attention to our misgivings about the financial status of people who might be involved in the licensing process and we wanted an undertaking from the Minister about the financial status of the "fit and proper" persons.
There were debates about the concerns of some regional electricity companies, but they were not considered to be of major significance. However, we felt that the Government had not given proper status to energy efficiency or the Energy Saving Trust. Indeed, they paid scant regard to the amendments that the trust offered to the Committee and to both parties.
We were all fortunate in having access to the support and lobbying of a number of groups from the gas industry, including British Gas and the United Kingdom Offshore Operators Association, from individual potential independent gas suppliers and a range of consumer organisations, some of which wanted status in legislation. We recognised that and sought to have them enshrined in the legislation.
We also felt that the Gas Consumers Council, whose future had been in some doubt, should be given certain formal responsibilities to justify its continued existence and to back its claim for additional resources. We were able to secure the interest of the trade unions involved, including Unison, which covers a plethora of different groups in the gas supply industry, and the GMB, which historically organised manual workers in the industry.
All those organisations made their amendments freely available to members of the Committee but, as far as I can recall, they were only twice picked up by Conservatives, perhaps by Back Benchers who were able to make their point and influence Ministers behind the Chair. It certainly did not happen in the Committee itself, where Conservative Back Benchers made the fewest contributions that I can recall. The one exception was the hon. Member for Rutland and Melton (Mr. Duncan), who tabled an amendment that was subsequently defeated by the Government and Labour members of the Committee because we felt that it would endanger certain aspects of the organisation of British Gas.
Never had I been in a Committee or participated in a debate on Report in which there were so few speeches from Conservative Back Benchers, and never has so little been offered by the Government in response to reasoned arguments and debate. Inoffensive amendments were even apparently tabled by the Liberals but they, too, received no support from the Government.
The Bill has been a disappointment. We approached it believing that it was wrong that British Gas should continue to enjoy the last remaining monopoly in the gas market—the domestic market. We recognised that British Gas had enjoyed a monopoly and that the original privatisation legislation included a number of privileges in return for it meeting certain social obligations. Some of those social obligations have been diluted in the Bill because it was conceded that British Gas no longer had a monopoly of domestic gas supply and therefore should not have to carry burdens. None of the burdens or obligations that we have identified has been enshrined in the Bill.
Time after time, my hon. Friend the Member for Edinburgh, South (Mr. Griffiths) has pointed out the dilution of the quality of service that British Gas offers to

consumers. There is little prospect of any improvement being made by any of the independent suppliers, either in overall or individual commitment. One group, spearheaded by United Gas, published a paper called "39 Steps and More", but because of the opposition of other independents the "and more" part was quietly dropped and we were back to the 39 undertakings to which British Gas was prepared to agree.
If we had had to consider only that aspect of the Bill, we could have said that vested interests were being taken into account and that the Government were listening to their friends in the City and in business, but there were other areas of concern too.
I should like to touch on the specific area of regulation, to which we returned in Prime Minister's Question Time today, when the division between the views of Conservative and Opposition Members was clear. We have found that division repeatedly when we have sought to address regulation. We felt that, after some nine years of privatisation and nine years of operation of the Office of Gas Supply under two different directors general, it would be appropriate to assess the situation, yet in Committee, on Report and whenever we have debated regulation we have come up against a buffer of complacency, embodied by the Minister for Industry and Energy. He says that there is nothing wrong with the world and that everything is fine. The only thing that the Government say about regulation is that, when perfect competition is achieved, somehow there will be no need for regulators. Indeed, they said last night that, like Lenin's state, regulation will somehow wither when perfect competition arises.
The nature of the market, the commodity it sells and the service that it provides to 18 million households across the country, whereby households may be heated and food may be prepared, cannot be determined exclusively by the regulator or the market alone. A regulator must take account of more than simply market considerations. It has been argued that if we changed the rules, somehow politics would intrude into the market system.
We know that, at the moment, provisions are made for the regulator to take account of the needs of elderly and disabled people, yet not of those who are on income support or low incomes. If two groups can be identified, it would be reasonable to introduce a third. It would be no less political. Indeed, we drew attention last night to the debates and the demonstrations that disabled people have staged inside and outside the Palace of Westminster in recent months. To say that disablement is not a political issue and that the rights of the disadvantaged and those on low pay is a political issue is nonsense.
I realise that there is a desire for us to complete our business this evening, so I shall not detain the House much longer. We entered into the liberalisation debate on gas in a spirit of co-operation and offered constructive criticism of the proposals. None of the issues that we have raised have received a scintilla of support or an ounce of co-operation from the Government; the Government have not travelled an inch along the road towards a compromise. For those reasons, I urge my hon. Friends to vote against Third Reading.
When we take office, we shall certainly wish to attack British Gas's monopoly and legislate for changes in it and in the gas market generally. We do not like the way in which this Bill will regulate the gas market so that 18 million families, who are dependent on gas, will have to


enter the market to attain the means by which they cook their food and heat their homes. For those reasons, I ask my hon. Friends to join me in opposing the Bill.

Mr. Rowlands: This Gas Bill is the third in a trilogy over the past 12 years. As a veteran of the previous two, I should like to consider briefly the contents of this Bill in the context of the evolution of the legislative process of gas privatisation.
I do not think that even the Minister could argue that there has been a logical progression in the gas privatisation process. The three Bills since 1982 have demonstrated in many ways the three contradictory objectives of privatisation: first, the Treasury demanded the maximum money possible; secondly, there was the idea of people's capitalism, with premiums on shares, which meant that the Government were not able to collect as much money; and, thirdly, enshrined in this Bill, there has been the idea of trying to create some new form of competition in what are otherwise monopolies.
As a Front-Bench spokesman on the original 1982 legislation, I remember fascinating debates with Lord Lawson, who envisaged legislation that would create an American-style privatisation—a common carriership and a huge collection of companies drawing off it. That vision was waylaid, as the Minister will be well aware because he too is a veteran of some of the arguments in the 1980s, by the corporatist tendency of Lord Walker. Barons Rooke and Walker got together and did a deal, which constituted the Gas Act of 1986. That deal basically enshrined British Gas's monopoly in the domestic market. The original Lawson legislation never intended to include the last remaining corporatist tendency, which was personified by Lord Walker and led to the 1986 Act. The Bill, as I see it, is trying to return to the original Lawson vision and create some new competition in gas.
I think that we have been very lucky, because the 1986 Act would not have produced anything like the same support for the consumer had it not been for the inspired appointment of the first director general of Ofgas, Sir James McKinnon. McKinnon has been much reviled in many circles, but he was the first regulator to care for consumers. The Littlechilds and the Carsbergs have been more interested in the theory of competition and in models. McKinnon, on behalf of the consumer, tenaciously attacked the monopoly powers of British Gas during his tenure of office.
Before we break up a large public corporation and the dominant share that it has had in domestic gas consumption, I should like to pay it one tribute. The Bill would not have been possible if it had not been for a nationalised public corporation that built the most remarkable, technically efficient natural gas pipeline. It was an amazing success story of professional and technical expertise, which was driven through despite great difficulty.
Whatever occurs in the field of competition as a result of this Bill will be dependent on that amazing exercise in technical proficiency by a nationalised concern. I know that it is now unfashionable to talk about such things—even, to a certain extent, in my party—but I pay tribute to the enormous post-war visionary generation,

represented by an era of professionals, especially technical gas engineers, who built the pipeline that will enable people to develop and thrive.
Two potential absurdities and two concerns arise from the Bill. The first absurdity is already happening and will become even more evident if the Bill proceeds. My hon. Friend the Member for Newham, South (Mr. Spearing) has described it. In future, when a gas engineer attends a safety call at somebody's house, identifies the problem and disconnects the supply, he will no longer be allowed to deal with the problem. He will no longer be able to repair the appliance, as he would have done in the old days. Presumably he now has to hand out a card and say, "This is the list of people you can phone." Instead of being able to deal with the problem, his operation will be ring-fenced and he will be able to deal only with the safety of the supply. In the past, he could have solved the whole problem and restored both the appliance and the supply, but now he will not be allowed to do so.
That is an appalling illustration of the nonsense and absurdity that will arise from the Bill. The second absurdity is the question of who will become the new competitors. I see the Under-Secretary of State for Corporate Affairs on the Government Front Bench, and as he represents Brecon and Radnor, I ask him: who will be the new competitors in south Wales? The margins for such competitors will be very small; who will they be?
In fact, the only competitor to British Gas likely to emerge in south Wales is the monopolistic South Wales Electricity company. What a rich irony, and what an extraordinary situation it would be if the competition came only from another private monopoly supplier of a rival form of energy. That would reveal the absurdity of some aspects of the Bill.
I have two more concerns, one of which involves safety. I am worried not about the powers in the Bill—on safety, those are strong enough—but about the people. We have had safe gas supplies for a generation, because of the fantastic training supplied by the British gas industry since the second world war. A whole generation of gas engineers were brought up properly to care for safety and to do a Rolls-Royce job. But the new generation of gas suppliers will not devote the same effort and money as the gas industry used to devote to developing gas engineers of that quality. In fact, they will draw on the quality of the generations trained by British Gas.
Secondly, as one who represents a valley community a long way from the southern North sea, my second concern is the differential pricing that will result from the Bill. We are reassured that there will be only a 2 per cent. difference, but all the figures are guesstimates. We are told that competition will result in a 10 per cent. saving, but that for communities at the end of the line, such as most of the valley communities, that saving will be only 8 per cent. Certainly the communities in Brecon and Radnor, represented by the Under-Secretary of State, will be at the end of the line.
What will be the scale and character of the differential gas pricing? I do not believe in the 2 per cent. difference; it is a guesstimate. What will happen if the price differentials widen? Our communities will be disadvantaged as a result of the so-called competitive legislation.
I said at the beginning of my speech that this was the third in a trilogy of Gas Bills. I make one prediction: before the end of the century there will be another Gas Bill to put right the wrongs that the Bill before us will have created.

Mr. Kevin Hughes: As we all know, the Bill has been comprehensively discussed in Committee and on Report, and the same is now happening on Third Reading. By now, the Minister for Industry and Energy should be well aware of the concerns of hon. Members, not least Opposition Members. Yesterday, uncharacteristically, I was able to welcome his announcement of extra funding for the Health and Safety Executive. That shows that he has at least listened to some of the concerns expressed by Opposition Members—and it puts paid to the rumours that his ears were only painted on.
I also welcomed the Government's decision in Committee to table a subsequent amendment slightly to change the conditions for receipt of the special home services for the elderly. The Ministers knows that I was worried about that, and I am pleased that the Government decided to respond to the concerns about equal treatment for men and women.
The protection in the Bill for low-income customers is minimal. The main requirement relevant to them is that a licence must not be drafted so as to exclude the premises of customers likely to default. For the provision of services for elderly people, the Government have been prepared to give special protection in the Bill. Although I welcome that, I ask the Minister why the two cases are different. The Government have not given a convincing response to that question.
Yesterday, we discussed the possibility of access to services being restricted by requirements for deposits or specific payment methods. The Government said that they did not believe that gas companies would attempt to do that, but in a competitive market one cannot rule out the possibility. Had they offered more support for the Labour amendments, we would have been able to send a clear message to the gas suppliers to ensure that they provided a reasonably low-cost service encompassing proper choice for all who want it.
The practice of offering different prices to similar-volume consumers should not be allowed when competition is introduced into the market. It would be bad for low-income and elderly consumers alike, because they constitute the vast majority of the 20 per cent. of households with no banking facilities.
The Government have not done enough to protect the more vulnerable consumers from the effects of the introduction of full competition into the service. The prospect of cherry-picking remains a problem, and customers will be left to face it alone. The Government have made their position clear, but I hope that they have listened to what has been said about the need to involve consumers and to recognise the special obligations that fall on companies that provide such an important service.
Affordable warmth is too important to be sacrificed to competition. British Gas may be big business, but that carries with it big responsibilities that affect public safety and the quality of people's lives; potential suppliers to the domestic market must recognise that fact. I hope that the Minister will convey our feelings to them.

Mr. Clapham: It will come as no surprise to the Minister to know that I am rather sceptical about the Bill. No one knows where competition in gas will take us, and many people may be disadvantaged. Already in Canada, whose gas industry is deregulated, prices have increased.
That could happen in the United Kingdom, because although there is now an oversupply of gas, the Minister will know that there is an enormous demand for gas within the energy industry. It is predicted that, by the end of the century, we shall be using as much as 40 million tonnes of gas, in coal equivalent. I also understand—the Minister will correct me if I am wrong—that there are now several new applications for gas-fired power stations, and that too will increase the use of gas.
In addition to the deregulation of the domestic market, the increasing marketing risks of gas production may inhibit the development of new gas fields. Those two factors—energy use and the marketing risks—could lead to higher prices. Yet yesterday, the Minister rejected the amendment that would have required the regulator to take account of supply.
The Bill is inadequate without the amendments that were tabled by the Opposition. Unfortunately, neither in Committee nor on Report was the Minister prepared to accept any of those amendments, which would have improved it. Some of them would have given the consumer safeguards. As it stands, the Bill fails to deal with consumer protection, security of supply and, in part, safety. Without new clauses 3, 6, 9 and 10, which the Minister rejected yesterday, the consumer has no statutory protection.
The Gas Consumers Council should be able to monitor the impact of the Bill on customers and to keep an eye on the prices charged and the quality of service delivered. That is fundamental if we are to ensure that the high standards set by British Gas are maintained. It is also essential that information on prices is widely publicised. I pointed out to the Minister yesterday that low-income customers on pre-payment meters consuming large quantities of gas are paying far more than other gas customers. The irony is that some customers with arrears are seeking pre-payment meters in the belief that they will save them money. Without the publication of prices in a standard form, people will not be given the opportunity to make informed choices.
When the Select Committee on Trade and Industry reported on the domestic gas market, it was unsure whether there would be advantages in terms of costs, benefits or risks. It would appear that only a small part of the cost of a therm of gas is likely to be influenced by competition. The standing charge is clearly an important element, and the Minister is aware that the regulator has proposed that the transportation element of the standing charge should be £15. That is possible because of a cross-subsidy from large users to small users. Without that mechanism, there would be millions of losers.
Do the Government intend to ensure that that cross-subsidy will continue without jeopardy? The Select Committee emphasised the need for assurance on that factor. I do not feel that social purposes will be in any way advanced by the Bill, and I urge Conservative Members to support the Opposition.

Mr. Nick Harvey: I had considerable sympathy with the plaintive cry of the hon. Member for Clackmannan (Mr. O'Neill) about the Government and the Minister. They were faced with Opposition members of the Committee who were essentially sympathetic to the subject, but having moved about 270 amendments of their own, they did not find it in their hearts to accommodate a few more from the Opposition, not least my own which, as the hon. Gentleman said, were comparatively inoffensive.
The Bill is far from perfect, its most obvious flaw being the primacy it seems to give to the creation of competition in a perfect theoretical framework over the practical interests of serving the consumer. Those points have been put forward by the hon. Member for Edinburgh, South (Mr. Griffiths) and his colleagues at length—often at considerable length.
The Bill seeks to create a competitive framework for the supply of gas to the domestic consumer which will in the long term serve the consumer better than a continuing monopoly—albeit a regulated one. It may well be that, as the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) mentioned, we will find ourselves returning to legislate again on the gas industry before the end of the century. I hope that that will not be so, and I also hope that those seeking amendments of the sort which have been tabled will have better fortune in another place. But the fact remains that the measure will be in the best interests of domestic gas consumers and, for that reason, I shall be supporting it this evening.

Mr. Nigel Griffiths: First, may I thank you, Madam Deputy Speaker, and the hon. Member for Staffordshire, Moorlands (Sir D. Knox) for chairing the Committee and being so patient with us as we went through a considerable number of amendments? The amendments came mainly from the Government because this is such half-baked legislation.
I also thank my hon. Friends who have spoken today—in particular my hon. Friend the Member for Newham, South (Mr. Spearing)—and my colleagues who have spoken with such conviction on Third Reading, including my hon. Friends the Members for Merthyr Tydfil and Rhymney, for Barnsley, West and Penistone (Mr. Clapham) and for Doncaster, North (Mr. Hughes). My hon. Friends spoke at length on behalf of their constituents and 18 million gas consumers. I should also like to thank my hon. Friends who spoke in Committee, including my hon. Friends the Members for Stockport (Ms Coffey), for Neath (Mr. Hain), for Dulwich (Ms Jowell), for Dagenham (Ms Church) and for Coventry North-East (Mr. Ainsworth).
This is the Third Reading of what Ministers have been trailing in the press as landmark legislation which is taking privatisation through the 1990s and is building on the so-called successes of the 1980s—successes which have turned sour for so many millions of consumers. It is amazing that not one Conservative Member spoke on Third Reading except the Minister. The Government could not get one of their own Back Benchers to stand up and say that the further privatisation of British Gas is worth supporting. It is also worth noting that none of the

hon. Members from the Scottish National party is in the Chamber, and no Scottish nationalist has spoken at all in this important gas debate.

Mr. Andrew Robathan: Will the hon. Gentleman give way?

Mr. Griffiths: I am delighted to see anybody who wishes to defend the SNP, which is a dying breed.

Mr. Robathan: I understood that the Labour party wanted to go home at 7 o'clock, and I did not speak for that reason.

Mr. Griffiths: The hon. Gentleman is sadly mistaken. We would be happy to fight this Bill until 7 o'clock, 8 o'clock or 10 o'clock at night, but the hon. Gentleman wants to maintain his supine position.
The Bill is supposed to be the flagship of the Government's legislation for this Session and, by giving a free hand to the private sector to lure customers away from British Gas, allows the chancers a chance to get their snouts in the trough. Yet from the hour that the Bill appeared in the Queen's Speech on 16 November, its progress has been a shambles.
Publication was expected in January, but it did not appear. The Bill did not surface at the beginning of February, or at the middle or the end of February. When it did appear in March, the schedules were not ready. We debated the Second Reading without key schedules, which did not appear until the week after the House gave the Bill its Second Reading. The schedules—the blueprint for the detail of the Bill—were simply not available because the Government had an army of civil servants struggling to close all the loopholes in this chancer's charter.
Second reading came and went, and still there were no schedules. It is no wonder the Government delayed producing the schedules. All the things that the Minister promised the House at Second Reading—guaranteed protection for elderly and disabled consumers, safeguards to protect rural gas customers and safeguards for low income groups—are not fully dealt with.
In Committee—a full 17 weeks after the Queen's Speech—the shambles continued. Some 71 amendments were tabled by the Minister to his own Bill. The Minister accuses us of opposing the legislation. Too right, but we could not match his opposition to the Bill, as shown by the number of amendments he had to table to it. He has tabled some 160 amendments to this half-baked legislation. He is saying to the House and to 8 million consumers, "Trust us—the future of gas is safe in our hands."
The Minister told the House yesterday that the poor executives of British Gas were going to make only 9p a share out of their executive options, when the real figure made so far by executives who have ripped off so many consumers is 85p, or about £1 million to the six directors of British Gas. The Minister feared that gas firms would be put off buying into British Gas if there were too many consumer safeguards in the Bill.
British Gas has already axed services and cut staff in preparation for the Bill, but the public outcry has forced the Government to introduce a battery of amendments to make sure that at least there are some consumer protections. However, the protections included are not adequate. That is why a staggering total of 231 amendments to the Government's own legislation have


been tabled. The Committee chairman, the hon. Member for Staffordshire, Moorlands, voiced his grave reservations about the number of amendments which had been tabled, and about the fact that the Minister had tabled them so late. With more than 70 amendments tabled in the past few days, we cannot recommend this legislation to 18 million domestic gas consumers.
Who has been absent through all this? It is no wonder that the President of the Board of Trade left the Cabinet on Monday and took a plane to China. He has decided that this legislation is not safe in the Minister's hands.
Let us consider the Government's track record and why we oppose the Bill on principle. The Minister told us that British Gas has cut prices to consumers by 21 per cent., but the price that it has been paying for that gas has fallen by more than 27 per cent. since 1986. We want to know what has happened to the 6 per cent. cut that British Gas has enjoyed, which has not been passed on to consumers.
The Government say that the Bill will guarantee no cuts. It is vital that we challenge that. We challenged the cuts—the loss of 160 gas showrooms and 50 home service advisers for disabled and elderly gas consumers. We know that there will now be no curbs on British Gas or any of its competitor companies. The Government have rejected curbs on executive pay, effective safeguards for elderly and disabled consumers, price guarantees for the future and all the consumer protection that we proposed. We reject the Government and all that they stand for, and I urge the House to reject the Bill.

Mr. Eggar: With the leave of the House, may I first say what a pleasure it was to be in a debate again with the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands)—these debates go back 10 years or so, but I enjoyed this one none the less. May I add my thanks to that given by the hon. Member for Edinburgh, South (Mr. Griffiths) to you, Madam Deputy Speaker, the Chairman of the Standing Committee and everyone who has been involved in preparing and drafting the Bill and helping to steer it through Committee and Report? May I also join with the hon. Member for Clackmannan (Mr. O'Neill), who paid tribute to the various groups outside the House who have played a constructive role as the Bill has been considered?
As the hon. Member for Edinburgh, South pointed out, we have had to introduce a number of technical amendments. Despite the fun that he was having at our expense, I am grateful to him and his colleagues for the sensible way in which we were able to handle those amendments. I would much rather not have had to proceed in that way, but there was no alternative.
The general objective of the Bill remains to build on successful experience in the industrial and commercial gas supply sector and to provide a sound foundation for the phased introduction of the benefits of competition to the 18 million domestic gas customers in the United Kingdom. Conservative Members believe that competition will reduce prices and improve services for consumers.
Opposition Members seem completely unable to grasp that the introduction of competition can benefit customers, whether they move to another independent supplier or stay with British Gas, and that has been a constant theme during the passage of the Bill. The reality is that nothing sharpens up a company and improves its performance

more than the prospect of its customers taking their business elsewhere. Despite that essential truth, the Opposition think that customers need to be protected from having a choice.
The Opposition consistently say that they are concerned about what the hon. Member for Clackmannan calls cherry-picking. They are really concerned about not being able to interfere and dictate the results before the competition commences. The old Labour party is in the ascendant.
I shall deal briefly with the points raised by Opposition Members. They claim that the Bill lacks adequate protection for groups of vulnerable customers. Let us examine that criticism. First, special services for pensioners, the disabled and the blind will continue, just as they have with British Gas. Indeed, the Bill and the licence ensure that those requirements for those groups will be as tough as or tougher than they are at present.
The Opposition have suggested that the social obligations are inadequate because they are not on the face of the Bill, but they simply do not appear to understand that a licence condition, as structured in the Bill, is as legally binding as a provision in the legislation. A large number of the current obligations of British Gas are dealt with in its licence. Of course, the standard conditions of licences cannot be changed without the agreement of the Secretary of State.
Some Opposition Members claimed that the Bill would discriminate against low-income customers, yet the real interest of those customers is in getting cheaper gas. That is what they want and, because prices will come down as a result of the Bill, they will benefit more, proportionately, from price reductions than other customers.
If Opposition Members are really concerned about helping low-income customers, they should have supported the Bill wholeheartedly. In practice, they have opposed it in detail and, had their amendments been carried, they would have made it virtually impossible for competition to arise in any meaningful sense.
I think that there is one thing on which hon. Members on both sides of the House are agreed—we are all concerned to protect the interests of those customers who have genuine difficulties in paying their bills. The Government are as concerned about that as anyone in the House; that is why all suppliers, as a condition of their licences, will have to follow debt and disconnection procedures that are designed to assist those in genuine difficulty.
Today, The Times said that the hon. Member for Edinburgh, South
clearly believes in the formulation of policy on the run.
It also commented:
fund managers … perceive Mr. Griffiths' style to be long on threats and short on debate.
Those of us who were members of the Standing Committee with the hon. Gentleman know that the fund managers are right, but we can go further and say that he is long on prejudice and short on analysis. His speeches have been wrong in almost every regard.
I shall give one example. In Committee, he said:
the public are concerned that British Gas is proposing to downgrade all the current licence conditions and to review the provision of Braille controls for blind people.


He continued:
I fear that blind, disabled and elderly people will be forced to pick up the bill for such services."—[Official Report, Standing Committee A, 21 March 1995; c. 32.]
Either in ignorance or deliberately, he was misleading the Committee, because the truth is that the draft standard conditions of licences make it clear that the existing service requirement will continue. The free gas safety check, special adaptors and controls, passwords and special inquiry facilities for the blind and disabled will all be there and will be guaranteed—all without charge.
The hon. Member for Clackmannan referred, at the beginning of this Third Reading debate, to the regulator and the role of regulation. He referred to the speech that his right hon. Friend the Member for Copeland (Dr. Cunningham) made this afternoon, which I have here. The general thrust was that, at present, the regulator has too much discretionary power.
After reading that analysis, I considered the amendments that the Opposition tabled to the Bill. In some areas, they tabled amendments that would have given the regulator more power, not less. They wanted the regulator to have the power to challenge the terms of consumers' contracts and, in effect, to be involved in decisions on the remuneration of gas company executives. They wanted the regulator to have a duty to secure choice to all consumers and not merely to promote it. Only yesterday, the hon. Member for Neath (Mr. Hain) was inviting the House to agree that the regulator should have regard for the industrial and strategic interests of the British economy.
On the one hand, the right hon. Member for Copeland, who leads his party on these matters, is saying that the regulator has too much discretionary power and, on the other, that the Opposition have been tabling amendments designed to increase that power throughout the passage of the Bill. It is no good the hon. Member for Edinburgh, South just grinning. He claimed earlier in our proceedings that he had written the speech for the right hon. Member for Copeland, so he does not understand either his amendments in Committee or what he has written for the right hon. Member for Copeland. He cannot have it both ways.
The Labour party's attitude to the Bill has been absolutely fascinating. We have seen a battle played out between old Labour—the hon. Members for Bolsover (Mr. Skinner) and for Brent, East (Mr. Livingstone) are in their places—and so-called "new" Labour. The hon. Member for Clackmannan made a speech last November in which he said:
it is not the function of Labour to defend British Gas as the monopoly supplier of gas to any sector of the UK market.
At that time, new Labour was on top and apparently in favour of competition.
To be fair, on Second Reading the right hon. Member for Copeland endorsed that competition. But official Labour abstained on Second Reading and it was left to the hon. Members for Bolsover, for Falkirk, West (Mr. Canavan), for Islington, North (Mr. Corbyn), for Preston (Mrs. Wise), for Bradford, West (Mr. Madden) and for Halifax (Mrs. Mahon) and the right hon. Member for Chesterfield (Mr. Benn) to vote against Second Reading. In Committee, new Labour prevailed, except the hon. Member for Neath when he bothered to turn up and make speeches for the benefit of his local papers. [Interruption.]

Madam Deputy Speaker: Order. What started as a series of private conversations has now become a hubbub. I am not prepared to preside over a hubbub. I therefore ask for considerably greater quiet.

Mr. Eggar: After hours of debate and a well-trailed speech by the hon. Member for Dunfermline, East (Mr. Brown) in which he extolled the virtues of competition, today on Third Reading the Opposition have a chance to say conclusively whether they are in favour of competition. That is the choice they must make in a few seconds when we go in to the Lobbies. Will the official Opposition represent a victory for new Labour in favour of competition, or for old Labour against competition? If they oppose Third Reading, they will show what we all know: that the Labour party has not changed and is still in favour of state control and against competition. A vote against Third Reading will be a vote for the hon. Member for Bolsover.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 297, Noes 228.

Division No. 149]
[7.22 pm


AYES


Ainsworth, Peter (East Surrey)
Carrington, Matthew


Aitken, Rt Hon Jonathan
Carttiss, Michael


Alison, Rt Hon Michael (Selby)
Cash, William


Allason, Rupert (Torbay)
Channon, Rt Hon Paul


Alton, David
Chidgey, David


Amess, David
Clappison, James


Arbuthnot, James
Clark, Dr Michael (Rochford)


Arnold, Jacques (Gravesham)
Clifton-Brown, Geoffrey


Arnold, Sir Thomas (Hazel Grv)
Coe, Sebastian


Ashby, David
Congdon, David


Ashdown, Rt Hon Paddy
Conway, Derek


Atkins, Robert
Coombs, Anthony (Wyre For'st)


Atkinson, David (Bour'mouth E)
Coombs, Simon (Swindon)


Atkinson, Peter (Hexham)
Cope, Rt Hon Sir John


Baker, Rt Hon Kenneth (Mole V)
Couchman, James


Baker, Nicholas (North Dorset)
Cran, James


Baldry, Tony
Currie, Mrs Edwina (S D'by'ire)


Banks, Matthew (Southport)
Curry, David (Skipton & Ripon)


Banks, Robert (Harrogate)
Davies, Quentin (Stamford)


Bates, Michael
Davis, David (Boothferry)


Batiste, Spencer
Day, Stephen


Bendall, Vivian
Deva, Nirj Joseph


Beresford, Sir Paul
Dorrell, Rt Hon Stephen


Biffen, Rt Hon John
Douglas-Hamilton, Lord James


Body, Sir Richard
Dover, Den


Booth, Hartley
Duncan, Alan


Boswell, Tim
Duncan-Smith, Iain


Bottomley, Peter (Eltham)
Dunn, Bob


Bottomley, Rt Hon Virginia
Durant, Sir Anthony


Bowis, John
Eggar, Rt Hon Tim


Boyson, Rt Hon Sir Rhodes
Elletson, Harold


Brandreth, Gyles
Emery, Rt Hon Sir Peter


Brazier, Julian
Evans, David (Welwyn Hatfield)


Bright, Sir Graham
Evans, Jonathan (Brecon)


Brooke, Rt Hon Peter
Evans, Nigel (Ribble Valley)


Brown, M (Brigg & Cl'thorpes)
Evans, Roger (Monmouth)


Browning, Mrs Angela
Evennett, David


Bruce, Ian (Dorset)
Faber, David


Budgen, Nicholas
Fabricant, Michael


Burns, Simon
Fenner, Dame Peggy


Burt, Alistair
Field, Barry (Isle of Wight)


Butcher, John
Fishbum, Dudley


Butler, Peter
Forman, Nigel


Butterfill, John
Forsyth, Rt Hon Michael (Stirling)


Campbell, Menzies (Fife NE)
Forth, Eric


Carlisle, John (Luton North)
Fowler, Rt Hon Sir Norman


Carlisle, Sir Kenneth (Lincoln)
Fox, Dr Liam (Woodspring)






Fox, Sir Marcus (Shipley)
Lightbown, David


Freeman, Rt Hon Roger
Lilley, Rt Hon Peter


French, Douglas
Lloyd, Rt Hon Sir Peter (Fareham)


Gale, Roger
Lord, Michael


Gallie, Phil
Lyell, Rt Hon Sir Nicholas


Gardiner, Sir George
Lynne, Ms Liz


Garel-Jones, Rt Hon Tristan
MacGregor, Rt Hon John


Garnier, Edward
MacKay, Andrew


Gill, Christopher
Maclean, David


Gillan, Cheryl
Maclennan, Robert


Goodlad, Rt Hon Alastair
McLoughlin, Patrick


Goodson-Wickes, Dr Charles
McNair-Wilson, Sir Patrick


Gorman, Mrs Teresa
Madel, Sir David


Gorst, Sir John
Maitland, Lady Olga


Grant, Sir A (SW Cambs)
Malone, Gerald


Greenway, Harry (Ealing N)
Mans, Keith


Greenway, John (Ryedale)
Marlow, Tony


Griffiths, Peter (Portsmouth, N)
Marshall, John (Hendon S)


Grylls, Sir Michael
Marshall, Sir Michael (Arundel)


Gummer, Rt Hon John Selwyn
Martin, David (Portsmouth S)


Hague, William
Mates, Michael


Hamilton, Rt Hon Sir Archibald
Mawhinney, Rt Hon Dr Brian


Hamilton, Neil (Tatton)
Mellor, Rt Hon David


Hampson, Dr Keith
Merchant, Piers


Hanley, Rt Hon Jeremy
Michie, Mrs Ray (Argyll & Bute)


Hannam, Sir John
Mills, Iain


Hargreaves, Andrew
Mitchell, Andrew (Gedling)


Harris, David
Mitchell, Sir David (NW Hants)


Harvey, Nick
Moate, Sir Roger


Haselhurst, Alan
Monro, Sir Hector


Hawkins, Nick
Montgomery, Sir Fergus


Hayes, Jerry
Needham, Rt Hon Richard


Heald, Oliver
Nelson, Anthony


Heath, Rt Hon Sir Edward
Neubert, Sir Michael


Heathcoat-Amory, David
Newton, Rt Hon Tony


Hendry, Charles
Nicholls, Patrick


Hicks, Robert
Nicholson, David


Higgins, Rt Hon Sir Terence
Norris, Steve


Hill, James (Southampton Test)
Onslow, Rt Hon Sir Cranley


Hogg, Rt Hon Douglas (G'tham)
Oppenheim, Phillip


Horam, John
Ottaway, Richard


Howard, Rt Hon Michael
Page, Richard


Howarth, Alan (Strat'rd-on-A)
Patnick, Sir Irvine


Howell, Sir Ralph (N Norfolk)
Patten, Rt Hon John


Hughes, Robert G (Harrow W)
Pattie, Rt Hon Sir Geoffrey


Hughes, Simon (Southwark)
Pawsey, James


Hunt, Sir John (Ravensbourne)
Peacock, Mrs Elizabeth


Hunter, Andrew
Pickles, Eric


Hurd, Rt Hon Douglas
Porter, Barry (Wirral S)


Jack, Michael
Porter, David (Waveney)


Jackson, Robert (Wantage)
Portillo, Rt Hon Michael


Jenkin, Bernard
Powell, William (Corby)


Jessel, Toby
Rendel, David


Johnson Smith, Sir Geoffrey
Renton, Rt Hon Tim


Jones, Gwilym (Cardiff N)
Riddick, Graham


Jones, Nigel (Cheltenham)
Rifkind, Rt Hon Malcolm


Jones, Robert B (W Hertfdshr)
Robathan, Andrew


Jopling, Rt Hon Michael
Robinson, Mark (Somerton)


Kellett-Bowman, Dame Elaine
Roe, Mrs Marion (Broxbourne)


Kennedy, Charies (Ross,C&S)
Rowe, Andrew (Mid Kent)


King, Rt Hon Tom
Rumbold, Rt Hon Dame Angela


Kirkhope, Timothy
Ryder, Rt Hon Richard


Knapman, Roger
Sackville, Tom


Knight, Mrs Angela (Erewash)
Sainsbury, Rt Hon Sir Timothy


Knight, Greg (Derby N)
Scott, Rt Hon Sir Nicholas


Knight, Dame Jill (Bir'm E'st'n)
Shaw, David (Dover)


Kynoch, George (Kincardine)
Shaw, Sir Giles (Pudsey)


Lait, Mrs Jacqui
Shepnard, Rt Hon Gillian


Lamont, Rt Hon Norman
Shepherd, Colin (Hereford)


Lang, Rt Hon Ian
Shepherd, Richard (Aldridge)


Lawrence, Sir Ivan
Sims, Roger


Legg, Barry
Skeet, Sir Trevor


Leigh, Edward
Smith, Tim (Beaconsfield)


Lennox-Boyd, Sir Mark
Soames, Nicholas


Lester, Jim (Broxtowe)
Spencer, Sir Derek


Lidington, David
Spicer, Michael (S Worcs)





Spink, Dr Robert
Trend, Michael


Spring, Richard
Twinn, Dr Ian


Sproat, Iain
Vaughan, Sir Gerard


Squire, Robin (Hornchurch)
Viggers, Peter


Stanley, Rt Hon Sir John
Waldegrave, Rt Hon William


Steel, Rt Hon Sir David
Walden, George


Steen, Anthony
Walker, Bill (N Tayside)


Stephen, Michael
Wallace, James


Stem, Michael
Waller, Gary


Stewart, Allan
Ward, John


Streeter, Gary
Wardle, Charles (Bexhill)


Sumberg, David
Waterson, Nigel



Watts, John


Sykes, John
Wells, Bowen


Tapsell, Sir Peter
Whitney, Ray


Taylor, Ian (Esher)
Whittingdale, John


Taylor, John M (Solihull)
Widdecombe, Ann


Taylor, Matthew (Truro)
Wilkinson, John


Taylor, Sir Teddy (Southend, E)
Willetts, David


Temple-Morris, Peter
Wilshire, David


Thomason, Roy
Winterton, Nicholas (Macc'fld)


Thompson, Sir Donald (C'er V)
Wolfson, Mark


Thompson, Patrick (Norwich N)
Yeo, Tim


Thornton, Sir Malcolm
Young, Rt Hon Sir George


Thumham, Peter



Townend, John (Bridlington)
Tellers for the Ayes:


Townsend, Cyril D (Bexl'yh'th)
Mr. Sydney Chapman and


Tracey, Richard
Mr. Timothy Wood.


NOES


Abbott, Ms Diane
Cousins, Jim


Ainsworth, Robert (Cov'try NE)
Cummings, John


Anderson, Donald (Swansea E)
Cunliffe, Lawrence


Anderson, Ms Janet (Rossendale)
Cunningham, Jim (Covy SE)


Anderson, Ms Janet
Dafis, Cynog


Armstrong, Hilary
Dalyell, Tam


Ashton, Joe
Darling, Alistair


Austin-Walker, John
Davies, Bryan (Oldham C'tral)


Banks, Tony (Newham NW)
Davies, Rt Hon Denzil (Llanelli)


Barnes, Harry
Davies, Ron (Caerphilly)


Barron, Kevin
Denham, John


Battle, John
Dewar, Donald


Bayley, Hugh
Dixon, Don


Beckett, Rt Hon Margaret
Dobson, Frank


Bell, Stuart
Donohoe, Brian H


Bennett, Andrew F
Dowd, Jim


Berry, Roger
Dunnachie, Jimmy


Betts, Clive
Dunwoody, Mrs Gwyneth


Blunkett, David
Eagle, Ms Angela


Boateng, Paul
Eastham, Ken


Bradley, Keith
Enright, Derek


Bray, Dr Jeremy
Etherington, Bill


Brown, N (N'c'tle upon Tyne E)
Evans, John (St Helens N)


Burden, Richard
Ewing, Mrs Margaret


Byers, Stephen
Faulds, Andrew


Caborn, Richard
Field, Frank (Birkenhead)


Callaghan, Jim
Flynn, Paul


Campbell, Mrs Anne (C'bridge)
Foster, Rt Hon Derek


Campbell, Ronnie (Blyfh V)
Foulkes, George


Canavan, Dennis
Fraser, John


Cann, Jamie
Fyfe, Maria


Chisholm, Malcolm
Galbraith, Sam


Church, Judith
Galloway, George


Clapham, Michael
Gapes, Mike


Clark, Dr David (South Shields)
Garrett, John


Clarke, Eric (Midlothian)
Gerrard, Neil


Clarke, Tom (Monklands W)
Gilbert, Rt Hon Dr John


Clelland, David
Godman, Dr Norman A


Clwyd, Mrs Ann
Godsiff, Roger


Coffey, Ann
Golding, Mrs Llin


Cohen, Harry
Gordon, Mildred


Connarty, Michael
Graham, Thomas


Cook, Frank (Stockton N)
Grant, Bernie (Tottenham)


Cook, Robin (Livingston)
Griffiths, Nigel (Edinburgh S)


Corbett, Robin
Griffiths, Win (Bridgend)


Corbyn, Jeremy
Grocott, Bruce






Gunnell, John
O'Hara, Edward


Hain, Peter
Olner, Bill


Hall, Mike
O'Neill, Martin


Harman, Ms Harriet
Orme, Rt Hon Stanley


Hattersley, Rt Hon Roy
Parry, Robert


Heppell, John
Pearson, Ian


Hill, Keith (Streatham)
Pendry, Tom


Hinchliffe, David
Pike, Peter L


Hodge, Margaret
Pope, Greg


Hoey, Kate
Powell, Ray (Ogmore)


Hogg, Norman (Cumbernauld)
Prentice, Bridget (Lew'm E)


Hood, Jimmy
Prentice, Gordon (Pendle)


Hoon, Geoffrey
Prescott, Rt Hon John


Howarth, George (Knowsley North)
Primarolo, Dawn


Howells, Dr. Kim (Pontypridd)
Purchase, Ken


Hoyle, Doug
Quin, Ms Joyce


Hughes, Kevin (Doncaster N)
Randall, Stuart


Hughes, Robert (Aberdeen N)
Raynsford, Nick


Hughes, Roy (Newport E)
Reid, Dr John


Hutton, John
Robertson, George (Hamilton)


Illsley, Eric
Robinson, Geoffrey (Co'try NW)


Ingram, Adam
Roche, Mrs Barbara


Jackson, Glenda (H'stead)
Rogers, Allan


Jackson, Helen (Shef'ld, H)
Rooker, Jeff


Jamieson, David
Rooney, Terry


Janner, Greville
Ross, Ernie (Dundee W)


Jones, Barry (Alyn and D'side)
Rowlands, Ted


Jones, Lynne (B'ham S O)
Ruddock, Joan


Jones, Martyn (Clwyd, SW)
Salmond, Alex


Jowell, Tessa
Sedgemore, Brian


Kennedy, Jane (Lpool Brdgn)
Sheerman, Barry


Khabra, Piara S
Shore, Rt Hon Peter


Kilfoyle, Peter
Short, Clare


Lestor, Joan (Eccles)
Skinner, Dennis


Lewis, Terry
Smith, Andrew (Oxford E)


Litherland, Robert
Smith, Chris (Isl'ton S & F'sbury)


Livingstone, Ken
Smith, Llew (Blaenau Gwent)


Lloyd, Tony (Stretford)
Snape, Peter


Loyden, Eddie
Soley, Clive


McAllion, John
Spellar, John


McAvoy, Thomas
Squire, Rachel (Dunfermline W)


McCartney, Ian
Steinberg, Gerry


Macdonald, Calum
Stevenson, George


McFall, John
Stott, Roger


Mackinlay, Andrew
Straw, Jack


McLeish, Henry
Sutcliffe, Gerry


McMaster, Gordon
Taylor, Mrs Ann (Dewsbury)


McNamara, Kevin
Timms, Stephen


MacShane, Denis
Tipping, Paddy


Madden, Max
Touhig, Don


Mahon, Alice
Turner, Dennis


Mandelson, Peter
Vaz, Keith


Marek, Dr John
Walker, Rt Hon Sir Harold


Martlew, Eric
Wareing, Robert N


Meacher, Michael
Watson, Mike


Meale, Alan
Welsh, Andrew


Michael, Alun
Wicks, Malcolm


Michie, Bill (Sheffield Heeley)
Williams, Rt Hon Alan (Sw'n W)


Milburn, Alan
Williams, Alan W (Carmarthen)


Mitchell, Austin (Gt Grimsby)
Wilson, Brian


Moonie, Dr Lewis
Winnick, David


Morgan, Rhodri
Wise, Audrey


Morley, Elliot
Worthington, Tony


Morris, Rt Hon Alfred (Wy'nshawe)
Wray, Jimmy


Morris, Estelle (B'ham Yardley)
Wright, Dr Tony


Mudie, George
Young, David (Bolton SE)


Mullin, Chris



Murphy, Paul
Tellers for the Noes:


Oakes, Rt Hon Gordon
Mr. John Owen Jones and


O'Brien, William (Nonmanton)
Mr. Joe Benton.

Question accordingly agreed to.

Bill read the Third time, and passed.

Mr. Donald Dewar: On a point of order, Madam Deputy Speaker. May I briefly ask your advice on a matter of some importance? In another place, Lord Mackay of Ardbrecknish announced that the jobseeker's allowance would not be introduced as planned on 1 April 1996, but would be introduced in October 1996—a delay of six months. Since then, we have obtained a little further information which makes the matter even more important.
In a written answer today, we are told that Ministers
have concluded that, in order to deliver an excellent service to unemployed people from day one"—
which sounds an interesting euphemism—
JSA should be introduced in October 1996.
It continues:
the duration of an unemployed claimant's entitlement to Unemployment Benefit will, from April 1996, be the same as it would have been had JSA been introduced on that date.
In other words, the cut from 12 to six months in entitlement will take effect from 1 April.
I am also told, although I cannot confirm it, that lower rates of unemployment benefit will be introduced as though JSA had been introduced on 1 April and that changes in structure, such as the differential rates for those below and above the age of 25 will be introduced on 1 April. I may be wrong, but it appears that the change in Government intention is a retreat in theory but not in substance, and that, to put it quite frankly, what happened today was a form of deception in terms of an apparent announcement that does not bear examination.
My concern is that, if they mean what they appear to mean, today's changes are extremely important. They also raise important issues about the Government, if they can announce that they do not intend to implement changes and then smuggle them in administratively. There would appear to be no need for a statement in the House or any administrative regulation or legislation in order to change unemployment structures into some kind of ghost of the jobseeker's allowance.
In view of all that, it is important that we have a statement at the earliest possible opportunity. I wonder whether you, Madam Deputy Speaker, have had any intimation of one, or if Ministers can reassure us that these rather mysterious and opaque goings on will be explained to the House so that we can judge them for what they are worth and take the appropriate action.

Madam Deputy Speaker (Dame Janet Fookes): I have had no intimation that a statement is to be made, but the Leader of the House is present and no doubt he will have heard what was said. Even if no statement is forthcoming, one can rely on the ingenuity of hon. Members in finding other legitimate ways of raising the issue.

Mr. Ian McCartney: On a point of order, Madam Deputy Speaker.

Madam Deputy Speaker: Is it the same point of order?

Mr. McCartney: No, it is a different point of order. I am the hon. Member who put the questions on the Order Paper on 11 May for written answer on 16 May. The parliamentary questions were delivered to me after they were submitted to the press in the Press Gallery. However, despite that, looking at the detail of the written answers,


it is clear that some fundamental questions still require answers. First, the Government did not state in the written answer—

Madam Deputy Speaker: Order. It seems to me that the hon. Member is raising the same point of order. I have said that I can deal only with matters that relate to responsibilities of the Chair. This is clearly not the responsibility of the Chair.

Mr. McCartney: I am raising a different point of order, Madam Deputy Speaker, relating to whether the Secretary of State has exceeded his powers in respect of the answer that I was given, which requires a response. I apologise if I am delaying the House, but the answer is vital to the business of the House. The position is clear—

Madam Deputy Speaker: Order. I am sorry to interrupt the hon. Gentleman but I can deal only with matters that relate to the responsibilities of the Chair. The matters to which the hon. Gentleman refers clearly do not. I must ask the hon. Gentleman to desist.

Mr. McCartney: I do not want to incur your wrath, Madam Deputy Speaker, but—

Madam Deputy Speaker: Order. I have effectively asked the hon. Gentleman to resume his seat. We must move on.

Mr. McCartney: The question that relates to the Chair is whether the Secretary of State's answer of 16 May in respect of my question of 11 May is ultra vires. If so, both the Leader of the House—who is present—and Ministers should come to the House with an explanation.

Madam Deputy Speaker: Order. Those matters are not for the Chair. I am not prepared to consider them further.

STATUTORY INSTRUMENTS, &c.

FEES AND CHARGES

Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &c),
That the draft Department of Trade and Industry (Fees) (Amendment) Order 1995, which was laid before this House on 3rd April, be approved.—[Mr. Kirkhope.]
Question agreed to.

NORTHERN IRELAND

Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &c),
That the draft Historic Monuments and Archaeological Objects (Northern Ireland) Order 1995, which was laid before this House on 3rd April, be approved.—[Mr. Kirkhope.]
Question agreed to.

EUROPEAN COMMUNITY DOCUMENTS

TELECOMMUNICATIONS INFRASTRUCTURE

Motion made, and Question put forthwith pursuant to Standing Order No. 102(9) (European Standing Committees),
That this House takes note of European Community Documents Nos. 10589/94 and 4674/95, relating to the liberalisation of telecommunications infrastructure, and the unnumbered Explanatory Memorandum submitted by the Department of Trade and Industry on 28th April 1995, relating to a future regulatory framework for telecommunications, and supports the Government's view that competition in the provision of telecoms services and infrastructure is essential to guarantee the widespread availability of affordable high quality telecoms within the European Community.—[Mr. Kirkhope.]
Question agreed to.

Orders of the Day — RJB (Mining)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Kirkhope.]

Mr. Clive Betts: I want to draw the attention of the House to certain events in my constituency on the Tinsley site and to ask questions of the Minister about the role played by RJB (Mining) and other companies with which its chairman, Richard Budge, has been associated. My questions concern the opencasting of the Tinsley site; the failure to provide an airport there; the role played by Sheffield development corporation, British Coal and its officials, and Ministers; and whether Richard Budge is a fit and proper person to run British Coal operations.
I shall not delve into the history of efforts to provide an airport for Sheffield, which is the largest city in Europe not to have an airport. During the 1980s, another survey of potential sites was made. The site at the top of the list, in terms of commercial viability and Civil Aviation Authority air safety, was Tinsley. Interest in the city, from a council and business perspective, was also being developed.
In 1987, British Coal changed that scenario by indicating that it wanted to opencast at Tinsley. Contrary to statements made from time to time, there has from the beginning been a close link between the opencasting at the site and the airport development, with the gains from the former helping to fund the latter being a key to subsequent events. The first sign of British Coal's wish to opencast was a press release, which stated that opencasting on the site would help to finance the proposed Sheffield airport and would not delay the city's wish to have the short take-off and landing airport in operation by 1991. We are now in 1995, and there is not an aeroplane in sight, let alone a runway. Nevertheless, that press release confirms the early link between the opencasting site and the provision of an airport.
I was not against opencasting on the Tinsley site. There are differences of view among Opposition Members about opencasting, and I oppose it when it is proposed for green-field sites and risks destroying the environment. The Tinsley site was extremely polluted, with the cost of ridding it of chemicals and other pollutants from the former steel works estimated at £20 million. It was badly despoiled but an ideal location, being next to the Ml in Sheffield's industrial corridor. It was a prime site for development.
I declare an interest as a Member of Parliament sponsored by the Transport and General Workers Union, which has members employed in the opencast industry. The site would create jobs, but there were local concerns about dust and pollution. The city council, which was then the planning authority, took steps as part of the planning agreement to ensure controls and constraints on times of working. We were also conscious of the fact that, if we turned down British Coal's proposals, its application for opencasting might have been granted on appeal, yielding none of the potential benefits for the locality.
In general, I support the provision of an airport on the Tinsley site. Again, community concerns about noise and flying hours must be taken into account. I am particularly aware of Phillimore school in my constituency, because recently there has been speculation that a requirement

fully to insulate the school from aircraft noise might be relaxed. I am not in favour of any such relaxation, but want the original proposals for proper insulation to be implemented.
There was full consultation and opinion surveys. I attended public meetings with colleagues and representatives of British Coal Opencast, and a community liaison group was established. By and large, the opencasting operations did not have a massive impact on the community. However, given the profits made from that site, I am concerned about constituents such as Mrs. Lilley, a pensioner. Dust from the site made it necessary to have cleaned her husband's headstone in the local cemetery. That cost her £100, which she could ill afford— and that bill still has not been paid by Richard Budge, his company or anybody else connected with the opencast operations. That sort of meanness is typical of the way in which the city of Sheffield has been ripped off.
There is real anger that British Coal got coal out of the site and Richard Budge got money out of it, but Sheffield still does not have an airport. Many supposed community benefits have not happened.
At the end of the consultation process in 1989, an initial planning agreement was drawn up, which clearly linked the opencast arrangements and the airport. From the beginning, Tony Palmer, British Coal Opencast's regional director, attended meetings that linked the two. He was associated with the press release that I mentioned. I found him to be a fair and open person with whom to do business. I put that on record because his consultation was very thorough. Sheffield city council was still the planning authority and granted the initial permission, and British Coal then placed a contract with A. F. Budge through its subsidiary, A. F. Budge (Mining), to opencast the site.
There were benefits for the community in return. A £250,000 community fund was established and many local groups have been involved in developing projects. A gipsy site was relocated and given improved facilities, which was welcome and important. Five holes of a local golf course were relocated and a new club house provided. There was also the access road to the edge of the site, to be built at a cost of £1.7 million. That, too, would benefit its future development.
There was also an agreement that once the site had been used for opencast mining, the ground would be compacted in such a way as to be suitable for laying a runway. Has the ground been thus compacted? People who worked on the site claim that the job was never done properly—the earth was just tipped back on to the site, and if anyone tried to lay a runway on it, he would end up with the airport equivalent of a traffic calming measure. Bumps would appear as the ground settled.
On 14 July 1989 a contract was agreed between British Coal Opencast and A. F. Budge (Mining) for 800,000 tonnes of coal to be extracted from the site. The planning gains were to be the other side of the coin; but clearly British Coal and A. F. Budge (Mining) were to make large profits from the site—there is no dispute about that. Indeed, just today I received from a Minister at the Department of the Environment a letter accepting the fact that all those community gains were specifically lodged in the original planning agreement, and formed part of it.
Immediately the initial planning agreement was drawn up, planning responsibility transferred from Sheffield city council to Sheffield development corporation. In the


recent "Panorama" programme, which included a great deal of excellent information, one of the issues that was not absolutely clear was the fact that, as events unfolded, the responsibility lay not with Sheffield city council but with Sheffield development corporation.
It is clear from the whole affair that the only gains to the community from the entire process were those stipulated in the planning agreement signed by Sheffield city council, which got the matter right and achieved something for the local community. The rest of the problems appeared once the council had left the scene—I shall return to some of the advice given by councillors in due course.
The development corporation was set up against the advice of the city council. We, like the chamber of commerce, opposed it in principle—the latter believed that it could work with us. Sheffield city council had entered into partnerships and joint working arrangements with the private sector in the mid-1980s, so nothing could be further from the truth than the view that Labour councils cannot sit down and talk to business, or that we are against development and against creating new industries and jobs.
The Government's view, however, was that the regeneration of derelict areas, and in particular of an area of Sheffield which had lost 40,000 jobs following the collapse of the steel and engineering industries, was a matter for development corporations. David Trippier, the Minister at the time, came to see me when I was leader of the council and asked what our response would be to a Sheffield development corporation with £50 million to spend.
I said that I thought that the city council, in conjunction with Government and private industry, working on a tripartite basis, would spend the money better and with more democratic accountability. I added that, if the Government were making it a take-it-or-leave-it offer, we would not wish away a development corporation with £50 million, which could benefit local people. Certainly, we opposed it in principle, but once it was established we would sit down and work with it and try to make it as big a success as possible. That was a difficult decision for the council, but none of what follows can be laid at the door of the city council's refusing to work with the development corporation.
We entered into a unique agreement with the corporation, trying to ensure that as much democratic accountability and openness as possible were brought to bear on the proceedings. We sat down with it to work for the benefit of the people of Sheffield. In all that follows, however, it is important to bear it in mind that this was ultimately a non-accountable body—except perhaps to Ministers, who must surely be responsible for what development corporations do, because no one else can be. Supposedly, furthermore, the body was set up not only because local Labour councillors would not work with business but because business acumen was needed to reach the right development decisions on behalf of local people. One can only smile at that in the light of what ensued.
In May 1990 Sheffield development corporation entered into a new agreement with A. F. Budge for the construction and operation of an airport on the site at Tinsley. It was going to be cross-subsidised by the development of adjacent land, by the company, for a business park. In some ways, that seemed a sensible

arrangement. But then, some time later, on 12 March 1991, came an extension to the opencast contract belonging to British Coal and lodged with AFB (Mining). That extension altered the tonnage to be taken from the site, from the 800,000 tonnes that the opencast executive had agreed initially with Sheffield city council, to 1.1 million tonnes.
I have seen communications from Ministers stating that there was no link between the opencast operation and the provision of infrastructure for, and the construction of, the airport. Nevertheless, from the very beginning in 1989, the initial planning agreement linked the two. Now Ministers claim that the extension of the agreement to mine opencast coal on the site was not linked with the further agreement to allow AFB (Mining) to develop the site for an airport. That is a key point in the whole discussion.
I have a letter, dated 15 May, from the office of the chairman of the British Coal Corporation, signed by Mr. Bryn Morris, corporate affairs director, in which he states:
In May 1990, Sheffield Development Corporation entered into an agreement with A. F. Budge (Mining) Ltd for the construction and operation of the airport and the development of adjacent land".
So far, we do not disagree.
Subsequently, on 12 March 1991 the opencast contract between British Coal and A. F. Budge (Mining) Ltd was altered, with the tonnage to be extracted from the site increased. This was as a consequence of the agreement between A. F. Budge (Mining) Ltd and the SDC with regard to the airport construction, which extended the time available for the operation of the opencast site.
So British Coal believes that the agreement to build the infrastructure for the airport and the extension of the opencast contract were linked—that, at any rate, is how its corporate affairs director understands the situation.
Ultimately, not the original 800,000 tonnes, nor even the extra 300,000 tonnes, were taken from the site: 1.5 million tonnes of coal were extracted. How was the extraction of the coal assessed? How did 400,000 tonnes more appear, as if by magic, right at the end of the scheme? Who did the calculations; who benefited from them; and what did the community get for the extra coal extracted? It appeared in no agreement, but it just so happens that 1.5 million tonnes was the amount initially requested by British Coal's opencast division back in 1987—a request that Sheffield city council refused to accept in the planning agreement of 1989.
In my mind, and in the minds of local people and of British Coal's opencast division, the airport agreement and the extension of the opencasting agreement were certainly linked, under the same parent company—A. F. Budge (Mining). Will the Minister publish all details of the agreements, so that if there is any dispute about them, the public and Members of the House can see them and come to their own conclusions about the truth of the matter?
On 15 March 1991, three days after the extension of the opencast agreement, another peculiar event took place. The opencast contractor, A. F. Budge (Mining), agreed to take over responsibility for any defects resulting from the improper compacting of the site within five years of the completion of that compacting. In return for taking over and guaranteeing to put right any defects—I should have thought that the contractor should be responsible for defects in any case—British Coal Opencast paid to A. F. Budge (Mining) £1 million. A private contractor


received £1 million of public money to put right the defects that resulted from its own failure to compact the site properly.
That of itself begs quite a few questions. Given that AFB (Mining) and its subsidiaries have now gone out of business, is British Coal Opencast still responsible for putting right defects on the site? Who is responsible? Having paid £1 million, is British Coal now left with the responsibility for putting right any defects of compaction? In other words, did it hand over £1 million to a private company for no return, or did it transfer those responsibilities in the deal done with RJB (Mining) as part of its takeover of British Coal's responsibilities in Britain? It would be interesting to hear the Minister's response.
What checks were carried out before the sell-off of all the operations on the viability of the work carried out by RJB (Mining) on the site? Was it compacted properly? I have asked the question and I shall repeat it because it is so important. When British Coal gave £1 million to AFB (Mining) in March 1991 for a guarantee that defects would be put right five years after work on compacting finished, just a year or more before the company became insolvent, what checks did British Coal Opencast make on the viability of the company? It is incredible that a public body should have accepted a guarantee from a private company stretching more than five years ahead, yet within 18 months that private company had gone bankrupt. Were any checks on its financial viability carried out?
In March 1992, the A. F. Budge group was restructured and Richard Budge, through his new company, RJB (Mining), bought out AFB (Mining)'s interests. The opencast contract at Tinsley was novated to that new company, but not the airport agreement. That is the crux of the issue. Why was the airport agreement not transferred to the new company when, clearly, all the way along the key issue was that the profits from the opencasting operation would help fund the airport project? Going back to the initial proposals in 1987, there is no doubt about that.
What is in some ways worse about the issue is that the agreement to guarantee any defects of compacting once they had become apparent after the opencasting had finished was not novated along with the rest of the opencast contract to RJB (Mining); it was kept in the A. F. Budge group and eventually novated to Sheffield airport, which was a subsidiary of the AFB group. Therefore, the responsibilities for carrying out the opencasting went to RJB (Mining), with all the profits, but the responsibility for putting the defects right, if there were any at the end of the contract, were left with a different company, which went into liquidation 18 months later.
Why was that allowed to happen? Given that Government approval must have been necessary for the novation of those two contracts to different companies, why was a split allowed at the time? Already, 1 million tonnes of coal had been taken out and half a million tonnes were to be taken out in the next year.
We know from asking questions that the airport arrangements were approved by Ministers. It is also clear from questions that I have asked that, although Ministers say that they did not approve the split of responsibilities between the two companies, they were clearly aware of

it. That split took place in March 1992. An answer that I received today from the Under-Secretary of State for the Environment states:
My Department was notified in December 1991 of the proposed company restructuring which would separate the mining and airport construction interest within the A. F. Budge group. No approval was required from my Department.
Why not? The Department had approved the initial airport contracts. Therefore, it must have had interest in whether they would go ahead. Yet it allowed that restructuring to take place and the split of responsibilities, including the novating of the compacting defects arrangement to a different company, apparently without any concern from Ministers that something very wrong was about to happen.
Those are all the very arrangements that led to the concerns of and investigations by Coopers and Lybrand into the role of the A. F. Budge directors, including Richard Budge himself, which led to the investigations by the insolvency unit and by the official receiver. Yet, despite the fact that those arrangements subsequently led to all those investigations, at the time Ministers were not concerned. They did not say that it was a matter on which they must take a view because it was so serious. They simply got the information and apparently did nothing with it.
That leads me to a range of questions that have to be answered by Ministers. In the end, we are talking about the spending of public money with no return. Why were the responsibilities allowed to be split in the way that they were—responsibility for the airport and its cost in one company and the benefits of and the profit from opencasting in another company? At that time, could not the problems of the A. F. Budge group have been foreseen? A company that went into liquidation within 18 months would not have given the impression at the time that it was financially sound. What financial checks were done on the companies in question by civil servants? What advice did Ministers get? Why were no cross-guarantees required? Were they even requested from the Budge companies so that one arrangement could support the other in the event of a company failure? What were the contract details? Will Ministers publish them?
At the end of the day, who made the decisions? Was it British Coal Opencast or the Sheffield development corporation? Ministers clearly knew about the arrangements. What advice did they give to the development corporation? If they did not give approval, did they give any advice throughout the whole of this? If they did not give approval, why not? Why did they not take the matter seriously?
What in all this was the role of Richard Budge himself? He was a director of A. F. Budge at the time. He had a 35 per cent. personal stake in the Sheffield airport company. It all looks too convenient, does it not? Somehow he manages to buy out the profitable parts of the business, with all the profits from opencasting, with an extra 300,000 tonnes agreed, which turns into an extra 700,000 tonnes without any particular approval being given, and with the costs of any defect arrangements being transferred to another company, so he is not responsible for them, yet all the responsibilities for providing the airport are left with another company.
Throughout all this, Sheffield city council was not involved because, as I said, from 1989 it ceased to be the planning authority. However, I have seen a brief that Sheffield city council's treasurer's department gave to


counsel at the time on the issue, which asks many questions about what was going on at Tinsley, but I simply cannot believe that its staff were the only people with their eyes open asking questions about what was happening.
The brief asks who the opencast mining contract was with—British Coal or R. J. Budge (Mining) Ltd.—because it seems rather confused throughout. What were the main financial provisions of the contract? They were never revealed. Had there been any significant changes in the terms of the original contract? Clearly there had, but it is not clear what they were. Had there been any changes to the parties to the contract or any of the sureties for the performance of the contract? What the sureties were and whether there were any is not clear. Had the contract been satisfactorily performed, operationally and financially? When would it be completed? In what state would the site be left on completion of the contract? That was an important question because of the doubts over compaction.
On the airport contract, the brief asked whether it was with A. F. Budge (Mining) Ltd., now renamed R. J. Budge (Mining) Ltd., with A. F. Budge Ltd. as surety for performance. What were the main financial provisions of the contract? Had there been any significant changes to the terms of the original contract? Why was the contract transferred to Sheffield Airports Ltd. when the R. J. Budge group split off from the A. F. Budge group? Why was the contract not left with RJB (Mining), perhaps retaining the A. F. Budge Ltd. guarantee and obtaining a guarantee from R. J. Budge's new holding company, RJB (Mining) plc? As Sheffield Airports Ltd. was only 65 per cent. owned by A. F. Budge Ltd., was the remaining 35 per cent. owned by Mr. R. J. Budge personally? Were any sureties or guarantees obtained from Mr. R. J. Budge?
How far, if at all, has the contract been fulfilled to date, operationally, financially and so forth? How was the Budge group selected to undertake the opencast mining and the airport contracts? What inquiries were made about the financial status of the Budge group before the contracts were entered into? How were the opencast mining contract and the airport contract linked? Did they stand alone commercially, or were the profits of the opencast mining expected to be ploughed back into the airport construction? Why was it decided to allow the contracts to be split between the two groups of companies?
If the Minister does not take shorthand, I shall be happy to give him that load of questions later; but I do not think that I should have to ask them tonight, or that officers in Sheffield city council should have to ask them. Civil servants should have been briefing Ministers, and Ministers should have considered them and then given advice to Sheffield development corporation. As a result of that advice, responsibility for the provision of the airport and profits from opencasting should not have been split as they were.

Mr. Dennis Skinner: Certain factors worsen the position. For instance—in the knowledge that they had not asked all the questions about the crook R. J. Budge, or seemingly had not—the same Government, faced with a bid from the same R. J. Budge to take over all the English pits and 20 other opencast sites, then allowed the man to be a serious bidder. There was no one else in the field, because he had bid for all three regions.

The Government allowed Budge to take the sites for £900 million-odd. Then, when he had them—with, as I have said, no other serious bidder in the field—this negligent Government knocked another £100 million of taxpayers' money off the original successful bid to allow their Tory friend the contract. It is a sorry saga, which started with the Sheffield airport site and the opencast sites and has ended with the success of a man who is likely to pour large sums into Tory party coffers for the next general election while telling miners that they must have a wage freeze.

Mr. Betts: As my hon. Friend has said, the whole matter prompts questions about the judgment of Ministers and the propriety of the actions of Mr. Richard Budge. Is he really a fit and proper person to control the future of British mining?
The matter did not end there, however. Not deterred by the fact that the responsibility for Sheffield airport had passed from him, Richard Budge saw the potential for such an airport—provided he did not have to fund it with the profits of his opencast operation.
In January 1993, lo and behold, there was a bid for the open partnership fund, for a Sheffield aerocentre project. That bid came from none other than a company headed by Mr. Richard Budge, whose proposals required £2 million of Government funds and another £1 million from Sheffield development corporation—as well as International Development Association grants of more than £2 million, which have subsequently been agreed.
Having had the money from the site and having separated the profit from that generated by the airport project through RJB (Mining), Mr. Budge then saw the possibility of developing the airport project and the business site associated with it at public expense. Again, questions must be asked about how that could be allowed to happen so soon. The Government eventually turned down the airport bid, but IDA grants to the tune of £2 million have been allocated.
A new company called Glenlivet has now become involved in the Sheffield airport project. As far as I am aware, it is not owned by Richard Budge or connected with him in any way—apart from the fact that the man in charge of the operation, Mr. Mike Shields, just happens to be the person who was in charge of Richard Budge's proposal to build the airport a few months earlier. I am not trying to persuade Ministers that Sheffield airport is not a good idea worthy of Government support. What I am questioning is whether the degree of Government support that will now be necessary is greater than it would have been, because some of the profits from the opencast operation should have gone into the airport rather than Richard Budge's pocket.
Indeed, Ministers might now spell out to us the extra cost to public funds of developing the airport—a cost that would not have been necessary had the original agreements been kept in one company, rather than being split. The responsibility for spending that money remains somewhere between Ministers, Sheffield development corporation and British Coal; Ministers might well expand on where they think it lies.
The role of Richard Budge throughout the affair prompts many questions. First, when the airport and opencast responsibilities were split between the two companies, did not Richard Budge—as a director of A. F. Budge—know the state of the company and its various


offshoots? As a director, was he not aware that the company was in financial difficulties? Should not Ministers ask those questions? Did Richard Budge not know that the airport deal was worth funding? Did he not have plans to retain an interest in it? Did he simply not want the responsibility of putting in his own money, preferring an opportunity to come back for more Government money rather than using the opencast profits?
Did not Richard Budge also cleverly manipulate the situation so that he would not end up with liability for the compaction defects on the site, but—although he was a contractor on the site—the liability would lie with Sheffield Airport Ltd., a subsidiary of the A. F. Budge group, which went into liquidation? Did Richard Budge reach any understanding with people on the site at Tinsley that the ground would not be compacted properly, so that even if money is now given for an airport more will have to be spent on putting right a site that should have been put right as one of the consequences of the original planning agreement? That certainly needs investigation; perhaps, if the Minister cannot give an answer tonight, he will commit the Government to carrying out such an investigation and reporting back.
How far was all this sorry mess taken into account in the determination of whether Richard Budge was a fit and proper person to take over British Coal operations—and, indeed, whether he was a fit and proper person to be a director of any public company? What was the role of Ministers, who clearly knew all about the actions at Tinsley, in deciding the fate of Richard Budge?
Was not their ultimate decision not to take action against him taken against the advice of Coopers and Lybrand, against the advice of the consultancy unit in the Department of Trade and Industry and against the advice of the official receiver? Perhaps Ministers will spell out who advised them of what at various stages. My hon. Friend the Member for Sherwood (Mr. Tipping)—who will probably want to speak later—has written a letter, a copy of which I have seen, asking Ministers to give the precise timetable; it will be interesting when Ministers respond to that.
Is it true that officials involved in the privatisation of British Coal attended meetings of officials in the insolvency unit while discussion of Richard Budge's future was taking place? Did Ministers themselves attend those meetings before final decisions about Richard Budge's future were made? Why was Richard Budge treated differently from the other directors of A. F. Budge, against whom action is apparently being taken? Richard Budge was a director of the same company; apparently, he took illegal loans. There are still question marks over those issues. He was responsible for the restructuring of the arrangements at Tinsley, which allowed him to walk away from his responsibilities to Sheffield airport and the defects in the compacting agreement.
Why did not Ministers tell the House about all those matters, and the various investigations that were taking place, when they presented their privatisation proposals to the House? Why did they leave themselves no alternative—no other companies in the frame that could be considered for the buy-out of British Coal operations? Did they not effectively put themselves in a completely

unviable position? If they had disqualified Richard Budge, they would have had no alternative, and the privatisation proposals would have fallen flat on their face.
I am sorry to go on for so long, but these extremely complicated issues need many answers by Ministers. A few matters are crystal clear. The opencasting and the airport were linked from 1987 when British Coal made its first proposals, and they were clearly linked in the first planning agreement in 1989. The council planning agreement at that time contained an arrangement whereby planning gains for the community took various forms and were linked to the start of an airport. That agreement was extended. It was agreed to take an extra amount of coal from the site and extra work was to be carried out on the airport infrastructure.
At some stage, those responsibilities were split, airport responsibilities remaining with the A. F. Budge group and RJB (Mining) taking on board the profitable operations of opencast mining on the site. There is, of course, no link between those two sets of responsibilities. After the split was carried out, no guarantees or sureties were apparently entered into or even asked for by SDC or by Ministers.
It is also clear that 1.5 million tonnes of coal were extracted from the site—nearly twice the amount allowed in the initial planning agreement. It was 400,000 tonnes more than even the extended agreement that was reached subsequently, and all that extra profit went into the pockets probably of British Coal but also of Richard Budge and his company and there was no return to the community.
The precise nature of the unpublished agreements is unclear. Who knew what and who made the decisions on all these matters as between SDC, British Coal and Ministers? What information was sought and what prior investigations were carried out before contracts were entered into with A. F. Budge and RJB (Mining) or any of the other companies involved? Were there any contingency arrangements? Why were guarantees not required and what will be the extra cost to public funds resulting from the collapse of A. F Budge and the fact that the airport will now have to receive more funding from the public purse?
Why has secrecy surrounded all those matters and why is public money being spent and the public interest being involved without proper openness? Was the ground finally properly compacted, and why was the defects agreement separated from the responsibility for opencasting and novated to Sheffield airport instead of RJB (Mining)? Why were the extra 400,000 tonnes of coal extracted and what benefit did that give to the community? What was the role of Richard Budge in all this? How much profit did he make? How many responsibilities did he leave behind that should properly have been paid for out of that profit? What did he know about the whole arrangement throughout?
It is just too convenient for Richard Budge somehow to make an arrangement under which he walks away with all the money while responsibilities for community provision are left behind by another company of which he is a director and which just happens to go into liquidation a few months later. In view of all that, there must be questions as to whether he is a fit and proper person to run the coal industry, bearing in mind all the other questions that have been raised about his role as a director of A. F. Budge at the time.
The history of the matter is a mixture of administrative incompetence, financial ineptitude, negligence and perhaps naivety and lack of accountability. It has all the appearance of sharp practice by the only individual who seemed to know what he was doing in his own interests. That person is Richard Budge, the chairman of RJB (Mining). As the Government, British Coal and SDC appeared to squander public resources or watch while they were being squandered, A. F. Budge collapsed, but Richard Budge walked away with the profits, not from the tonnage as originally agreed but from 1.5 million tones, thereby giving himself an even stronger financial base from which to mount his bid to run British Coal.
In my view and the view of my constituents that has left deep unease and concern about the whole situation but especially about Richard Budge and his company. That unease and concern will be addressed only by a full public inquiry into this whole affair. It has to be brought out into the open and must be the subject of full public scrutiny.

Several hon. Members: rose—

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order. I understand that the hon. Member for Wallsend (Mr. Byers) has sought the agreement of the hon. Member for Sheffield, Attercliffe (Mr. Betts) and the Minister to take part in the debate. Any other hon. Member hoping to catch my eye must do likewise.

Mr. Stephen Byers: I congratulate my hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts) on securing this debate. He has understandably concentrated on the effect of RJB (Mining) on the Tinsley site in Sheffield and also raised some wider issues about the role of Richard Budge and the part that RJB (Mining) will play now that it has control of what remains of the English coalfield. I want to address those wider issues.
The House will be aware that on 12 October 1994 RJB (Mining) was named by the Government as the preferred bidder for the remains of the English coalfield. As my hon. Friend the Member for Attercliffe said, the chairman of that company is Mr. Richard Budge. Based on information in my possession, I have to say that there must be serious doubts about whether it was appropriate for the Government, in view of what they knew about the conduct of Richard Budge as a former director of A. F. Budge, to name his company as the preferred bidder.
I understand that Richard Budge was named by Coopers and Lybrand in its report and also in the first report by the official receiver. As I shall later show, there were two reports by the official receiver. The first report named Richard Budge as a person whose conduct was such that an application should be made to the court for him to be disqualified from holding a future directorship in any company. These are serious allegations, which I shall seek to support in my contribution.
We need to be aware that at the time of these events two issues were effectively running in parallel. One was the investigation into the collapse of the A. F. Budge group of companies. In addition, the Government's political imperative was to secure the privatisation of the coal industry. In December 1992, administrative receivers were appointed to the A. F. Budge group of companies and Coopers and Lybrand was appointed to report to the

insolvency service, which is part of the Department of Trade and Industry. It was to report on the events surrounding the collapse of A. F. Budge and in particular on the liabilities, responsibilities and conduct of individual directors of the A. F. Budge group.
The Coopers and Lybrand report was submitted to the insolvency service on 28 September 1993. I understand that that report highlights the conduct of, in particular, three former directors of A. F. Budge and questions their fitness to be directors. One of the three named was Mr. Richard Budge. The insolvency service took time to consider the Coopers and Lybrand report and the official receiver reported on 25 July 1994.
I understand that on that date the official receiver recommended that a report be made to the court under the Company Directors Disqualification Act 1986 applying for three former directors of A. F. Budge, one of whom was Mr. Richard Budge, to be disqualified from holding office as directors of any company. That report was not acted upon. Word had begun to circulate in the Department of Trade and Industry and to set alarm bells ringing in the special unit which had been set up to oversee the privatisation of the coal industry. Everything was put on hold until a decision was taken about who the preferred bidder for the coal industry was to be.
Tenders were submitted in September 1994 and, as we know, on 12 October 1994 RJB (Mining) was named as the preferred bidder for the English coalfield. It is of particular interest that no fallback position was announced at the time. It was agreed that RJB (Mining) should be the one and only company to form the substantive part of the preferred bidder. The Government, however, had a problem: what should they do with the official receiver's report of 25 July?
The official receiver was asked to reconsider the position. On 11 November, 14 November and 15 November 1994, he interviewed the three directors named in his original report for disqualification, no doubt to try to find out whether new evidence existed of which he had not been aware before his original report. Mr. Richard Budge was interviewed on the first of those dates. Following those interviews, advice was given by the official receiver to Ministers. On 21 November 1994, the decision was taken to bring disqualification proceedings against just two of those interviewed, and Mr. Richard Budge escaped liability and responsibility. Following that recommendation, on 7 December 1994 a report against the remaining two directors was made to a court for their disqualification as company directors. With one bound, Mr. Richard Budge was free.
Given the Government's commitments to the privatisation of the coal industry, Labour Members will understand why it was so important that some quick solution was found to get Mr. Richard Budge off the hook. In addition to the political imperative, however, he clearly had friends in high places. On no less than seven separate occasions, he met the Minister for Industry and Energy, who is responsible for coal privatisation, to discuss matters relating to that privatisation. Those meetings were all held at important and strategic times: 17 June 1992, 29 June 1992, 1 March 1993, 26 March 1993, 15 April 1993, 15 June 1993 and 7 July 1994. He had access to a Minister that even many Labour Members do not have.
Of course, Mr. Budge has other friends in high places. I am told that people attending Doncaster races on 10 September 1993—I do not know whether you were there,


Mr. Deputy Speaker—were surprised to see a helicopter emblazoned with the RJB (Mining) logo land in the centre of the race track. Mr. Richard Budge got out, which was not unexpected, given that it was his helicopter, but who was he accompanied by? He was with Lord Wakeham, at that time Leader of the House of Lords and a member of the Cabinet, who was out for a day at the races.

Mr. Paddy Tipping: Does my hon. Friend recall that the noble Lord was called in during the coal crisis, when the Government wanted to close pits, to sort out the problem, and that he chaired a Cabinet committee to resolve the issue? Was he not therefore a man with real influence?

Mr. Byers: My hon. Friend makes an important point. Hon. Members should never forget that it was Lord Wakeham who, when he was a Member of this House and Minister with responsibility for energy, awarded a contract to Rothschild to advise the Government on coal industry privatisation. I shall not discuss the fact that he is now a Rothschild director as that would not be appropriate for this debate.
Clearly, therefore, Mr. Richard Budge is a man with friends in high places. He knows how to operate the system on behalf of RJB (Mining). I was interested to learn that in 1993 he took over Clipstone colliery in Nottinghamshire, that he made a deal, that he effectively reopened it after it had been closed for a fairly short time, and that, as the new owner, he entered into an arrangement with North Nottinghamshire training and enterprise council whereby for every miner he re-employed he would receive a grant of £1,000 for retraining purposes.
In total, in 1993–94, he obtained £150,000 for RJB (Mining) from that TEC. What is of particular interest is that the House of Commons Library informs me that in 1993–94, the same year in which Mr. Budge's company received £150,000 from North Nottinghamshire TEC, he was a director of that TEC.
Many questions need to be answered. The Minister will be pleased to learn that I have just two to add to the list submitted by my hon. Friend the Member for Attercliffe. Will the Minister now publish the Coopers and Lybrand report into the conduct of the former directors of A. F. Budge? Secondly, will he publish the official receiver's initial report of 25 July 1994? Refusal to do so will lead all reasonable people to believe that there is a cover-up and that the Government have something to hide.
All the available information points to this being a shameful and shoddy affair. The issue will not go away. Labour Members will continue to pursue it until we receive some straight answers to those important questions.

Mr. Paddy Tipping: I congratulate my hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts) on securing the debate. I should like to put on the record my thanks to the Minister for allowing me to take part and for his helpful attitude to questions since he became a Minister at the Department of Trade and Industry only a few weeks ago. His openness contrasts with the difficulties that we have had in obtaining information.
I wish the people who have bought the newly privatised industry no harm. I regret the passing of the coal industry into the private sector, but I wish the new coal owners well because they have a monstrous task before them. You, Mr. Deputy Speaker, will recall perhaps better than anyone that contracts with the generators run until 1998. Some of us are have real concerns about what the coal industry faces after that. In view of that, I wish the people who own the industry, and more particularly the people who work in it, well and a good future.
I want to raise issues that some of my colleagues have not dealt with and to extend the debate. I remind the Minister that on 12 October 1994 Mr. Richard Budge was named as the preferred bidder in a blaze of glory at the Tory party conference. We also know that in November 1994 he made a bid of £914 million for the three English coal regions. We know that because I have a copy of the presentation that he took round the City.
At the end of November 1994 I wrote to the Chairman of the Public Accounts Committee to say that I was extremely concerned about the bid. It was far in excess of anybody else's bid and I suspected that there would be negotiations to knock the bid down. A few days later I was proved right because the deal concluded for the sale of the coal industry in England to Mr. Budge was £815 million. My hon. Friend the Member for Bolsover (Mr. Skinner) has already asked the relevant question, but I want to reinforce it: how is it that, in only a few days, the value of the coal industry fell by £99 million? Clear questions need to be asked and clear answers need to be given.
That is not the end of the matter. We know that the deal that Mr. Budge did with the Department of Trade and Industry through all the brokers was to buy the industry, as miners in Nottinghamshire say, on the never-never. All the other bidders were told that they had to pay cash up front. The deal that was eventually concluded allowed RJB (Mining) to buy the industry over three years with deferred payments. So, as well as the £99 million loss, I calculate that the deferred payments over three years will result in a further loss of £116 million.
Some of my hon. Friends have already pointed out that the preferred bidder was named in October. I find it staggering that the other bidders—a wide range of other people could have bought the English coal industry—were told between October and December to go away and not to keep their financing in place. So, from a very early day, the Government were committed to Mr. Budge. Part of the problem now is that the Government walked down the gangplank with Mr. Budge and, when the going got tough and the sea got stormy, they had no alternative but to jump into the water with him.
These are significant issues and I am delighted that the Public Accounts Committee is looking at these matters. I hope that things will be clarified when the Public Accounts Committee receives the report. My only sadness is that it will be the autumn before we know about this. Many of us were raising concerns about the proposed sale in the autumn of last year and it is bizarre that we can examine the matter only in retrospect. That is one of the reasons why I welcome the debate. I hope that the Minister will be open and honest about the dealings and the relationships with RJB (Mining).
There are other issues that concern me. I have looked carefully at the documents that RJB (Mining) has produced over the years. I was interested to see that in its


"Pathfinder" prospectus, which was published in November 1994, it says that the company's chief executive, Mr. Richard Budge, received an annual salary of £235,000. For the year after the purchase of British Coal—the present year—his salary will increase to £290,000 plus a £50,000 acquisition bonus. Put another way, that reflects a salary increase of 45 per cent. The prospectus also shows that the remuneration committee of RJB (Mining) will have a discretionary power to pay a performance-related bonus of up to 100 per cent. at the end of 1995 if the company performs well. In the space of just over a year Mr. Budge's salary could increase to £630,000—an increase of 168 per cent. from November 1994.
What galls the miners in Nottinghamshire, Yorkshire and throughout the country—all those who work for Mr. Budge and RJB (Mining)—is the letter that they received in February. Mr. Budge wrote to the work force saying that there would not be a base rate adjustment in pay until March 1998. He justified that in the letter by saying that, because of the alleged difficult and competitive economic climate, the company could not afford to pay more.
It is staggering that miners throughout England who have worked hard and raised productivity by 150 per cent. in recent years as well as producing coal at half the cost of Germany should be told by their new chief executive, "Times are tough, lads, and you will take a pay freeze until March 1998. However, if things go well for me, my salary will increase to £630,000—an increase of 168 per cent."
RJB (Mining) was purchased by Mr. Budge out of A. F. Budge in a management buy-out in February 1992. It is clear that, even before the buy-out A. F. Budge was facing major financial difficulties. One of the things that concerns me as a taxpayer—I hope that the Minister will pursue this point with the chairman of British Coal—is how in 1991 British Coal could make advance payments of £10.5 million to A. F. Budge for an opencast site at Eastpit near Swansea. That is an unprecedented interest-free loan. It has not been possible at this stage to get to the bottom of the matter with British Coal.

Mr. Michael Clapham: In his research into A. F. Budge, has my hon. Friend come across any contributions to the Conservative party? If so, can he quantify the contributions that have been made over recent years?

Mr. Tipping: I shall come to that in a moment.
We ought to acknowledge that the payment of £10.5 million to A. F. Budge in 1991, according to its then chairman and chief executive, Mr. Tony Budge, kept the company afloat for an extra year. There is no doubt about that. In a sense, A. F. Budge was being looked after by the taxpayer. As my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham) has just suggested, we need to examine the relationship between A. F. Budge, Mr. Tony Budge and the Conservative party.
There is no doubt that there are clear links. I understand that, despite his difficulties, Mr. Tony Budge is still the vice-president of the Newark Conservative party. I know from experience that Mr. Tony Budge has raised a great deal of money for the Conservative party through fund-raising events and that he was chairman of an east midlands group of industrialists which also raised money

for the Conservative party. Although his company was looked after with £10.5 million, it is clear that he had previously been looking after the Conservatives.
My hon. Friend the Member for Wallsend (Mr. Byers) talked about the process of A. F. Budge going into liquidation and asked a number of specific questions about the timetable of events. When did Ministers receive reports from Coopers and Lybrand and then from the Official Receiver and when were decisions taken to prosecute former directors of A. F. Budge? I find it very difficult to understand why three directors of A. F. Budge—Mr. Tony Budge, his wife, Janet Budge, and a finance director, face court action whereas Mr. Richard Budge does not.
My principal concern relates to the loans that Richard Budge had from the companies with which he has been associated. I have no doubt—indeed, it is documented in the reports that Ministers have received from Coopers and Lybrand—that Mr. Richard Budge had a loan account of £400 million with A. F. Budge.
People like me wanted to know what a loan account is. In simple terms, it means borrowings from a company. One of Mr. Richard Budge's borrowings from A. F. Budge was £12,500 for the hire of a marquee for a family party. In addition, on 30 March 1991, a payment of £10,000 in petty cash was made to him. That is extremely disturbing behaviour, and I believe that Coopers and Lybrand and the liquidators found such payments distressing. As my hon. Friend the Member for Wallsend said, Mr. Richard Budge was criticised in the reports. On a D2 form, it was said that Mr. Richard Budge's behaviour made him unfit to be concerned in the management of a company.
The prospectus issued by RJB Mining in the autumn of last year contains a paragraph which states that Mr. Richard Budge paid back £325,000 to the liquidators, without admitting any liability, in order to pay the loans that he had had with the company. I believe that that payment is in breach of the Companies Acts and that Coopers and Lybrand and the draft report produced by the Insolvency Service took the same view.
There appears to be a record of pathological behaviour because, having bitten once, Mr. Richard Budge bit again. The prospectus also contains the following phrase:
During the financial period ended 31 December 1992, the company entered into credit transactions with R. J. Budge. In so doing, the company did not comply with the provisions of the Companies Act. The maximum aggregate value of these transactions was £70,442".
Mr. Richard Budge had a loan account of £400,000 with A. F. Budge. He cleared it at the insistence of the liquidators but, as his own company prospectus makes clear, he went on to have a further loan account with his new company amounting to £70,000 in breach of the Companies Acts.
Ministers cannot say that they were unaware of such behaviour as the documents are a matter of public record. Indeed, I would go further and remind the Minister that, in December last year, I wrote to his colleague, the President of the Board of Trade, pointing out a raft of issues that led me to be concerned about the fitness of Mr. Richard Budge to run the deep coal industry.
I wrote to the President of the Board of Trade before the contract to buy the industry was signed on 24 December. I have now written again, asking him to produce a detailed timetable of when reports were


received from the liquidators, who was involved in making decisions, what advice Ministers received from their civil servants and whether it is true that the DTI unit involved in selling the coal industry was holding meetings in another part of the building with the Insolvency Service to consider what might happen to Mr. Richard Budge?
My hon. Friend the Member for Sheffield, Attercliffe talked about the ingenious financing that enabled the good to be cherry-picked by Mr. Richard Budge's company and the liabilities to be left elsewhere. Let me draw the Minister's attention to a company called Moira Pottery based in Leicester. It was a loss-making company acquired by A. F. Budge which was interested not in pottery but in the opencast reserves that lay underneath the company's premises. We now know, because the record is at Companies house, that when RJB Mining was bought out of A. F. Budge, Moira Pottery was acquired for £1. It was subsequently valued at £1 million. Accusations are being made that there were attempts to transfer A. F. Budge's prime assets out of the company and into a new company, RJB Mining.
People are extremely concerned about those issues. The time has now come for the Minister and his colleagues who were there before him to come clean. I am delighted that the Public Accounts Committee is looking at the matter. I regret that it will take time to report. Many of us want to see a strong, deep coal industry in this country. The men who work in the industry deserve that. For that industry to succeed, it is important that the whole tale is told and that all the secrets are let out of the cupboard so that the coal industry can go forward, into a new future without skeletons. There are enough skeletons in the history of the coal industry without there being more holding it back.

The Parliamentary Under-Secretary of State for Industry and Energy (Mr. Richard Page): May I start by congratulating the hon. Member for Sheffield, Attercliffe (Mr. Betts) on not only his skill in securing this Adjournment debate, but on somehow managing to get it into a time frame in which half an hour has extended to something like two and a half hours? I think that that is only right, however. It is a complicated subject and it is only right that we discuss it and try to clear up some of the misunderstandings and dispel some of the conspiracy theories that seem to be puzzling and worrying Opposition Members.
May I say right at the start that I well understand the concern of the hon. Member for Attercliffe over the failure of the Sheffield city airport project to go ahead. I do not want to damage his political standing in Sheffield. Indeed, the hon. Gentleman and I sat side by side and watched the "Panorama" programme on which he appeared. I thought that he gave a splendid presentation in which he represented, quite justifiably, the concerns of his constituents. Of course the "Panorama" programme had been so edited that it was as jerky as a silent first world war film. But that is by the by.
Before I address the questions raised, I would like to make one or two general points regarding coal privatisation. The Labour party continues to suggest that coal privatisation has been a mistake and a failure. The hon. Member for Bolsover (Mr. Skinner) is not present at

the moment. He came into the House, issued one of his usual rants and has since disappeared. I regret to say that he, among others, will not accept the reality that privatisation has been a considerable success. We set out a clear objective to achieve the largest economically viable coal industry in the long term and to ensure value for money for the taxpayer. As the House knows, the sale was successfully concluded in December, and it was far from being the failure predicted by so many Opposition Members.

Mr. Clapham: The Minister must realise that, in 1993, before the coal closure programme was enacted, there were 50 collieries. At the present time, there are some 28 collieries, which were previously part of British Coal, and there are a number of other smaller collieries, which have always been outside the public sector. Those 50 collieries employed 50,000 men. At the present time, around 6,000 men are employed in the industry. In other words, we have seen the loss of 44,000 jobs since 1993. How can he justify that as a success? The other thing that the Minister must remember is that the remaining 28 collieries are high-technology collieries, which were transformed by the public purse. Of course productivity in those collieries is high—purely and simply because of the mining technology which was paid for by the taxpayer.

Mr. Page: I do not want to get diverted too far down that route. Otherwise, we would have to be here, if we were allowed, until about 12 o'clock. I must delicately point out to the hon. Gentleman that, if he looks at the history of the coal industry, he would find that his party has closed more mines and put more miners out of work than any other. I commend his courage in allowing me to draw attention to that point.
We have, as I say, created a successful industry and in creating that successful industry, we have received proceeds just short of £1 billion, which is a significant boost for public finances. Competition has been increased, with the transfer of former British Coal mines to a number of companies. RJB (Mining) now operates or is developing a total of 20 collieries, as the hon. Member for Barnsley, West and Penistone (Mr. Clapham) said, across central and northern England—more than British Coal operated or was developing at the time of privatisation. Coal Investments is operating or developing half a dozen collieries. Scottish Coal operates another significant deep-mine complex, and there are management and employee buy-out teams at Tower colliery in south Wales and Hatfield in Yorkshire. Between them, those companies have some 29 former British Coal collieries, twice the number that it had been claimed would survive.
In the new private sector, companies are making a success of their business. New customers are being found. British Steel has bought British-mined coal from Tower colliery in place of imports for the first time for many years. Tower colliery is even selling coal to France. New employment opportunities are opening up with the re-opening of collieries that have been on care and maintenance and the new apprenticeship schemes offer by RJB (Mining). Productivity is improving and costs are coming down.
I shall now talk about the case of RBJ (Mining), and I shall start with Sheffield airport, on which the hon. Gentleman legitimately spent so much of his time. As I said earlier, he has been assiduous in pursuing the matter


on behalf of his constituents, and I already understand the acute disappointment that he must feel because the Sheffield airport project has not gone ahead.
The hon. Gentleman started by expressing concern about the splitting of the responsibility for providing the infrastructure for an airport at Tinsley, Sheffield, and about the Government's role. I shall outline some of the essential facts, and do my best to answer as many as I can of the questions that have been asked. But at one stage in the debate the questions were coming like machine-gun bullets, and I shall certainly not be able to answer all of those. However, I assure the hon. Gentleman that I shall read the Official Report of the debate afterwards. I hope that Hansard has faithfully recorded all the points that he made, and I shall return to him and let him have the details about all the questions that I do not cover tonight.
In May 1990 A. F. Budge (Mining) Ltd.—which subsequently became RJB (Mining) Ltd.—and A. F. Budge Ltd. contracted with Sheffield development corporation for the construction and running of an airport at Tinsley Park, Sheffield, part of which was then being worked as an opencast coal mine by A. F. Budge (Mining) Ltd. under a contract from British Coal.
Such a disposal of a large area of land for what might be described as an unusual use required the consent of the Secretary of State for the Environment. As the hon. Gentleman will know from the answer given to him on 9 May—he has already referred to it—such approval was given. Subsequently several variations in the terms and time scales provided for in the contract were agreed between the parties.
During 1991 discussions took place to separate the Budge mining operations run by Mr. R. J. Budge from the principal Budge construction and other companies run by his brother, Mr. A. F. Budge. That involved, among other things, the formation of a new company—Sheffield Airport Ltd., a subsidiary of A. F. Budge Ltd., the holding company of the Budge Group of companies. Those discussions were concluded in February 1992, when there was a management buy-out, led by Mr. R. J. Budge, of the coal mining operations.
The terms of the airport contract for Tinsley Park were varied, releasing A. F. Budge (Mining) Ltd. and bringing in Sheffield Airport Ltd., which, with A. F. Budge Ltd. as surety, was to undertake the development—although it was my understanding that the intention remained that A. F. Budge (Contractors) Ltd., another A. F. Budge Group company, would carry out the work.
Let us be clear about three things. First, the restructuring of the A. F. Budge Group and the disposal of the coal mining operations were the subject of detailed consideration and reports by solicitors and accountants acting for the parties. The agreements were crawled over by accountants and solicitors.
Secondly, the variation of the Tinsley Park airport contract, releasing A. F. Budge (Mining) Ltd., was agreed to by the Sheffield development corporation. The hon. Member for Attercliffe asked many questions about who had agreed to this and who had agreed to that. I must remind him that Sheffield development corporation was not an innocent party standing on one side. It was in a position to make many of those inquiries and to find out many of the answers before going ahead.
Thirdly, as the hon. Gentleman will also know from the answer given to him on 9 May, although the Department of the Environment was aware of the variations of the

contract, it was not necessary for it to give its approval or otherwise to be involved, as the holding company, A. F. Budge Ltd., continued as surety for the performance of the contract. I am not aware that the administrative receivers or the liquidators for the A. F. Budge Group of companies have sought to challenge the transaction itself.
To complete the history—

Mr. Betts: The Minister referred to the fact that the A. F. Budge Group had a surety for Sheffield Airport Ltd. and the provision of the airport. That does not answer the question about the splitting of responsibilities for mining and making a profit and building the airport and incurring expense. The letter from the office of the chairman of British Coal which I read out said that those two matters were linked and that agreements were drawn up.

Mr. Page: I am unaware of the contents of the letter that the hon. Gentleman received from British Coal, but the information which he has given suggests that these agreements were not linked and that the Sheffield development corporation agreed to the particular splits which took place. A degree of responsibility for this matter must lie with the Sheffield development corporation.
I wish to complete the history of Tinsley Park, which I recognise is most disappointing to the Sheffield development corporation and the people of Sheffield. The administrative receivers were appointed in relation to A. F. Budge Ltd. in December 1992, and subsequently in relation to other A. F. Budge Group companies.
Clearly the A. F. Budge Group was not in a position to undertake any construction on the site. In March 1993, Sheffield Airport Ltd.—which had no other business assets—formally notified the Sheffield development corporation that it was not able to proceed with the development. Discussions took place between the corporation and the administrative receivers to try to find a solution, but none could be found. The site was eventually handed back to the corporation. Sheffield Airport Ltd. was wound up by the courts in October 1993, with the corporation claiming payments under the contract relating to the purchaser of an area of land adjoining Tinsley Park which the A. F. Budge Group intended to develop as a business complex.
I am told that the notified liabilities of that company total some £407,000, although further claims could come under the contract. The minimal assets of £10,000 are likely to be absorbed by the costs of winding up. The hon. Member for Attercliffe has asked for some form of inquiry, but he will know from the answer given to him by the Under-Secretary of State for the Environment on 9 May that that Department has no plans for a public inquiry into the contract relating to the Tinsley Park airport development.
With regard to the A. F. Budge Group, detailed consideration was given to the restructuring which took place in February 1992, including the disposal of the mining operation by that group, the administrative receivers and the official receivers. That consideration was taken into account in their reports to the Insolvency Service under the Company Directors Disqualification Act 1986. It was also taken into consideration in the service's decision in relation to disqualification proceedings.
A few points were raised over the compaction of the site at Tinsley Park. The hon. Gentleman is concerned about what happened to the £1 million paid by British Coal for compaction once the mining had finished and the site had been prepared for the construction of the airport. It is my understanding that the payment to A. F. Budge (Mining) Ltd. went into the A. F. Budge Group account, and was used with other group funds, to finance on-going group operations.
The hon. Gentleman asked what checks were carried out on financial liability, but that is a commercial matter for British Coal.
For accounting purposes, A. F. Budge (Mining) Ltd. was thus shown as owing the £1 million by A. F. Budge Ltd. on an inter-company account.
When the A. F. Budge Group was restructured and its mining operations were bought out in February 1992, Sheffield Airport Ltd. took over some of the obligations of A. F. Budge (Mining) Ltd. in relation to the airport development contract. The inter-company account of £1 million shown as due to A. F. Budge (Mining) Ltd. by A. F. Budge Ltd. was transferred to Sheffield Airport Ltd. As far as I am aware, no cash changed hands. I am sure that the administrative receivers of the A. F. Budge Group and the liquidators of Sheffield Airport Ltd. considered any questions raised about the use of those moneys.
One of the questions raised in the debate dealt with the tender price.

Mr. Betts: I have been listening with interest to what the Minister had to say about compaction. He has not said why the obligations to guarantee putting right the defects in compaction work five years after that work had been completed were novated to Sheffield airport, which seems a strange company to take on that responsibility, and not transferred with the novation of the contracts on opencasting to RJB (Mining), which would have seemed a more logical and legitimate place for them to rest.

Mr. Page: I cannot say why it went that way. I have had no evidence to suggest that the compacting has not been done correctly. If it has not, in the first instance, it will be a matter for British Coal.
The reduction in the bid by RJB (Mining) was made out to be some sort of back-door deal, but it was not. The tender price was adjusted as envisaged in the information memorandum issued by Rothschilds. The adjustments reflected developments since tenders were submitted in September 1994—or information that was not available to bidders when they submitted their tenders. The adjustments would have been available to any other preferred bidder. As I said, even after those adjustments, RJB's bid was considerably higher than the others.
The hon. Member for Wallsend (Mr. Byers), beguilingly, tried to suggest that, if I could release the reports of the official receivers and Coopers and Lybrand, I would be a decent, open and honest sort of fellow. I am afraid that this is where I am going to be a constant disappointment to the House because those reports are confidential and come under the Company Directors Disqualification Act 1986. If they were not confidential, in future many people would be reluctant to give

information in such cases and the truth of the operations of one or two companies would not, therefore, come to hand and the correct decisions might not be made.

Mr. Tipping: Will that report be made available to the National Audit Office, which is acting for the Public Accounts Committee in looking at the sale?

Mr. Page: The straight answer is that I do not know. I served for seven years on the Public Accounts Committee and we were most assiduous in trying to get information out of aspects of Government when we thought that we could find out where money had been wasted or spent incorrectly. I am afraid that that is a question that the hon. Gentleman will have to direct to the Comptroller and Auditor General.
The hon. Member for Wallsend tried to work up some sort of conspiracy theory, suggesting that the Government were trying to help one of their friends—all that about secret meetings and Ministers getting involved with people who are involved in the industry. It would have been a peculiar way of doing it and an expensive form of conspiracy if, after one of those conspiratorial meetings, the gentlemen involved paid £200 million plus more than the nearest bidder. The hon. Gentleman also asked me about a timetable and perhaps I can help him a little.
On 9 December 1992, the first A. F. Budge Group company was put into administrative receivership. On 28 September 1993, administrative receivers submitted conduct reports on directors. On 25 July 1994, the official receiver submitted reports of initial investigations, including considerations of administrative receivers' conduct reports. The Treasury solicitors were instructed and counsel was engaged to advise on preparation of the case. Administrative receivers were employed to undertake further inquiries at the direction of the official receiver.
On 12 October, RJB (Mining) was told that it was the preferred bidder. On 21 November, the Insolvency Service decided to instigate proceedings against the three directors, who have already been mentioned, and the decision was endorsed by the Minister. But, as has been made perfectly clear, proceedings were not taken against Mr. Richard Budge and other directors. On 7 December, summonses were served against those three directors and, on 8 February this year, the first hearing of application in the case was outlined to the court. The hearing was then adjourned to a second formal hearing.

Mr. Tipping: It is helpful to know that timetable. I thought that I heard the Minister say a few seconds ago that counsel was instructed to take the prosecution forward. Was legal advice taken from just one counsel, or was it taken from a variety of sources?

Mr. Page: I shall write to the hon. Gentleman if I am incorrect, but I believe that more than one source of legal advice was obtained.

Mr. Byers: The timetable reflects the sequence of events that I outlined. However, the important point is that we had the report from the official receiver on 25 July. Will the Minister confirm that that report recommended that disqualification proceedings should be taken against Mr. Richard Budge because he was not a fit person? On


12 October, he was then declared to be the preferred bidder. He was re-interviewed on 11 November and, lo and behold, on 21 November he was suddenly free and disqualification proceedings were not to be taken against him. That is my interpretation of events. What recommendations did the official receiver make on 25 July concerning Mr. Richard Budge?

Mr. Page: As I mentioned earlier, the report is confidential and I cannot reveal its contents. As I was saying, the hon. Gentleman could draw one or two conclusions from the timetable and details that I have given, which any prudent politician would deduce.

Mr. Betts: May I help the Minister on that point? He may be trying to tell Opposition Members that if the official receiver's report in July did not recommend that action should be taken against Mr. Richard Budge, there would be no need for further interviews.

Mr. Page: The hon. Gentleman must not deduce anything from what I have said.

Mr. Betts: I can deduce what I like.

Mr. Page: Obviously, the hon. Gentleman can deduce things. That is entirely up to him. It is his privilege. I see nothing peculiar in the various representatives in this matter undertaking a series of interviews with a number of people who have been involved in this matter. In no way does it imply a crime, irresponsible act or shortcoming.
The Department started out with a clear objective to return the British coal mining industry to the private sector to secure the largest economically viable coal industry in the long term while ensuring value for money for taxpayers. That has brought significant improvements. One or two Opposition Members conveniently forget that, since 1979, the coal industry has had stuffed down its throat £19 billion of taxpayers' money. I look forward to the day when it starts to pay some tax back to the people of this country.

Question put and agreed to.

Adjourned accordingly at twenty-four minutes past Nine o'clock.